In a letter to South Korea's National Assembly, Daniel Shin said that local law enforcement agencies are investigating him for his role in Terra's collapse in May, and his testimony could be tainted.
Authorities in South Korea ordered KuCoin and OKX to freeze over 3,300 BTC they claim is owned by the Luna Foundation Guard, but Kwon claims he knows nothing about it.
South Korea says that Interpol has acted on its request to add the Terra founder to its Red Notice list as the walls continue to close in on the fugitive.
The bill has undergone several amendments, and the latest would protect Americans from a Terra-like collapse by banning "endogenously collateralized" tokens.
South Korean authorities issued an Interpol red notice against Kwon last week concerning the failed DeFi project, claiming he had fled to Singapore.
Prosecutors in South Korea filed a request with the Foreign Ministry to invalidate the passport of Kwon and four others behind the collapsed LUNA and UST.
Financial Supervisory Service Governor Lee Bok-hyun argued that caution should be exercised in passing judgments on whether or not a digital asset can be categorized as a security.
The warrant from the Supreme Prosecutors Office was issued for five others who worked at Terra, with South Korean authorities accusing them of violating the Capital Markets Act.
The risks of investing in the digital currency industry remain high as Fed continues to tighten its policies to counter inflation, while fear spreads among potential investors caused by manipulative platforms.
South Korea's regulatory board is eyeing sanctions against financial institutions linked to illicit forex transactions to safeguard its digital assets market following intense scrutiny among banks.
Investigators from the Seoul Southern District Prosecutors Office searched the offices of several digital assets exchanges to seize records and other materials related to the Terra collapse, according to reports.