Terra Co-Founder Do Kwon Allegedly Converted Stolen Funds to Bitcoin
- South Korean prosecutors take action against Terraform Labs co-founder Do Kwon and associates for alleged fraud, identifying $314.2 million in illicit assets
- Most of the assets tied to Kwon, including Bitcoin, are reportedly unrecoverable as they were converted using overseas crypto exchanges
- Binance cooperates with authorities, while Terra Luna's collapse underscores the need for transparency and accountability in the cryptocurrency market, urging investors to exercise caution
South Korean prosecutors have taken action against
Terraform Labs co-founder Do Kwon and his associates for Converting Illicit assets to Bitcoin.
South Korean prosecutors have taken action against Do Kwon, co-founder of Terraform Labs, and his associates for alleged fraud, identifying illicit assets worth 414.5 billion won ($314.2 million). Of this amount, approximately 91.4 billion won ($69 million) has been linked to Kwon.
However, most of the assets tied to Kwon are reportedly not recoverable as he is believed to have converted them into Bitcoin using overseas crypto exchanges instead of physical assets.
In an effort to recover some of the illicit funds, South Korean authorities have requested Binance, a popular cryptocurrency exchange, to halt any withdrawal requests associated with Kwon. Binance has confirmed its cooperation with prosecutors and is providing necessary assistance.
Prosecutors are also tracing properties associated with other Terraform Labs executives, including former CEO Shin Hyun-Seong, to recover stolen funds. Assets such as homes and foreign-registered vehicles and lands have been seized and foreclosure actions have been filed in various locations to prevent former Terra employees from selling items tied to legal cases.
Terra Luna was once a thriving crypto ecosystem, built on the algorithmic stablecoin Terra-USD classic (USTC). However, in May 2022, the stablecoin depegged, leading to the collapse of the entire $40 billion ecosystem within days. Investigations revealed that fraud, allegedly involving Kwon and Terraform Labs, was at the heart of the matter.
Kwon had evaded arrest for almost a year before finally being caught in Montenegro on March 23, despite an arrest warrant from South Korean authorities and an Interpol red notice against his name.
The collapse of Terra Luna highlights the importance of transparency and accountability in the cryptocurrency world and serves as a reminder for investors to remain vigilant and do their due diligence to avoid falling victim to fraudulent schemes.
