Do Kwon, who co-founded the business that created the cryptocurrencies Terra Luna and TerraUSD, is the subject of an arrest warrant issued by a South Korean court.
Investors were alarmed by their stunning drop earlier this year, which caused key token prices to crash.
The Singapore-registered Terraform Labs, according to the prosecution, violated capital market regulations.
In May, Terra Luna lost 99% of its value, which was made worse by a decline in TerraUSD, its sister currency.
A comment from Mr. Kwon was requested by the BBC on Thursday, but he did not react right away.
Kwon and five other people involved in the case have arrest warrants, a representative for the South Korean prosecutor's office told the BBC. She wouldn't say how near the authorities were to making the arrests, though.
Mr. Kwon is reportedly believed to be in Singapore, a country without a formal extradition treaty with South Korea.
In a recent interview with the cryptocurrency show Coinage, Mr. Kwon stated that it was "sort of hard" to determine whether to go back to South Korea.
Additionally, he asserted that he "never spoke with the investigators."
According to the Financial Times, prosecutors intend to deactivate Mr. Kwon's passport and cooperate with the international policing organization Interpol to arrest and extradite him from Singapore.
Midway through May, the Terra Luna token dropped from a high of nearly $100 (£87) to $0.09.
Its demise was associated with and made worse by a decline in TerraUSD's value, a so-called "stablecoin."
Stablecoin developers work to maintain parity with other assets, such as the US dollar. But TerraUSD's price dropped to $0.40.
A sell-off in popular cryptocurrencies like Bitcoin, Ethereum, and Tether was sparked by the collapse of Terra.
The phrase "crypto crash" became popular online as a result.
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