Terraform Labs CEO Sent $7 Billion to Law Firm Before Ecosystem Collapse

South Korean prosecutors have confirmed that Terraform Labs CEO Do Kwon sent $7 billion to Kim & Chang, a top South Korean law firm, just before the collapse of the Terra ecosystem. The prosecutors believe that Kwon’s decision to send the funds was a deliberate move that allegedly reaffirmed his awareness of the impending collapse and anticipated legal problems. The law firm’s lawyers also visited Montenegro to meet with Kwon and Terraform’s former CFO, Han Chang-joon.

Kwon was previously arrested at Podgorica airport in Montenegro after trying to fly to Dubai using fake documents. Both United States and South Korean authorities have sought Kwon’s extradition, but the court has yet to decide. On April 7, South Korean prosecutors suspected Kwon of converting illicit funds from Terra (LUNA) to Bitcoin (BTC) and requested Binance to halt all withdrawal requests linked to Kwon.

In total, prosecutors identified $314.2 million in illicit assets associated with Terraform Labs co-founder Kwon and his associates, out of which about $69 million is reportedly directly linked to Kwon. The information regarding Kwon’s transfer of $7 billion to the law firm is expected to help in the ongoing fraud case against him and his associates.

The allegations against Kwon and his associates highlight the risks associated with cryptocurrency investments and the importance of transparency and accountability in the management of cryptocurrency projects. The case also highlights the role of law enforcement agencies in investigating and prosecuting financial crimes in the cryptocurrency industry.

The outcome of the ongoing fraud case against Kwon and his associates will have significant implications for the cryptocurrency industry, particularly in South Korea, where regulatory authorities have been cracking down on illegal activities in the sector. It remains to be seen how the case will unfold and what impact it will have on the future of Terraform Labs and the broader cryptocurrency ecosystem.


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Seoul Prosecutors Reveal Terra’s Do Kwon is Hiding in Europe

The exact location of Do Kwon, the founder, and CEO of the failed stablecoin company Terraform Labs, currently remains a mystery. However, South Korean prosecutors have identified that the wanted crypto fugitive may be in Europe, according to Bloomberg’s report on Friday.

The prosecutor’s office said Do Kwon is currently residing in Europe as his location has been partially discovered. The law enforcement agents said Kwon recently moved to a third country located in Europe—via Dubai.

After the mess regarding the infamous TerraUSD’s collapse, Kwon fled South Korea and moved to Singapore in September. On September 17, South Korean prosecutors unearthed more details about Kwon’s movement, saying that the crypto developer had left Singapore and flown to Dubai likely as a stopover to destinations unknown. Now they are more certain that Kwon’s current residence is in Europe, as law enforcement continues digging for his precise location.

Besides efforts to trace Kwon’s location, the South Korean prosecutor’s office on Friday said they have obtained evidence indicating that Kwon had once ordered an employee to manipulate the price of Luna Classic (LUNC).

Price Manipulation Evidence

The prosecution office said they have obtained a “conversation history” in which “CEO Kwon specifically ordered price manipulation.”

During the last bull market, the price action of Terra’s LUNC, formerly Terra (LUNA), was undoubtedly one of the cryptocurrencies with the best performance.

According to data from crypto price and information data platform CoinGecko, LUNA surged in value by over 2,800% from $4.18 in late May 2021 to its all-time high of $119.18 on April 5 2022, before its dramatic collapse on April 30.

In early September, the Seoul Southern District Prosecutors’ Office issued an arrest warrant for Kwon and five others on charges of violating the country’s financial laws. The prosecutors issued various charges against Kwon and others including fraud and tax evasion. Kwon was believed to be in Singapore at that time as police said he was no longer in South Korea.

Later that month, Interpol issued a “red notice” for the search and arrest of Kwon. The move came after South Korean authorities had requested assistance from the global police agency to trace Kwon’s whereabouts earlier that month.

Kwon and his firm faced investigations by South Korea’s government after the value of his cryptocurrencies, Luna and TerraUSD, plummeted and contributed to a $300 billion crash across the crypto economy in May. The plunge caused massive losses among investors and led to calls for an inquiry into Kwon and his firm after allegations of fraud and tax evasion.

Image source: Shutterstock


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