A South Korean court has issued an arrest warrant for Do Kwon - who co-founded the company behind the Terra Luna and TerraUSD cryptocurrencies.
Their spectacular collapse earlier this year spooked investors and saw the values of major tokens plummet.
Prosecutors believe that Terraform Labs, which is registered in Singapore, had violated capital market rules.
Terra Luna lost 99% of its value in May and this was aggravated by a fall of its sister token, TerraUSD.
Mr Kwon did not immediately respond to a BBC request for comment on Thursday.
A spokesperson for the South Korea prosecutor's office told the BBC that arrest warrants had been issued for Kwon and five other individuals connected to the case. However, she declined to comment on how close authorities were to making the arrests.
According to media reports Mr Kwon is believed to be in Singapore, which does not have an extradition agreement with South Korea.
Mr Kwon said it was "kind of hard" to decide whether to return to South Korea in a recent interview with crypto show Coinage.
He also claimed to have "never been in touch with the investigators".
Prosecutors are planning to arrest and extradite Mr Kwon from Singapore by nullifying his passport and working with international policing organisation Interpol, the Financial Times reported.
Neither Interpol nor Singapore Police responded to a BBC request for comment.
The Terra Luna token fell from a high of over $100 (£87) to $0.09 in mid-May.
Its collapse was linked to and made worse by a fall in the value of TerraUSD, a so-called "stablecoin".
Companies behind stablecoins try to ensure that they remain in parity with assets including the US dollar. However, the value of TerraUSD fell to $0.40.
The collapse in Terra trigged a sell-off in major cryptocurrencies such as Bitcoin, Ethereum and Tether.
As a result the term "cryptocrash" trended online.
