SEOUL — Prosecutors in South Korea have discovered 414.5 billion won ($314.2 million) in unlawful assets connected to Do Kwon, the co-founder of Terraform Labs, and his associates. Approximately 91.4 billion won ($69 million) of the mentioned amount has been directly linked to Kwon.
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Despite accumulating millions, Kwon’s assets cannot be seized by South Korean authorities because he allegedly converted most of the illegal funds into Bitcoin (BTC) through foreign cryptocurrency exchanges instead of investing in tangible assets.
This information was disclosed in a report released by local media outlet KBS. Furthermore, the former CEO is currently under arrest.
In the initial stages of the investigation into the Terra collapse, the United States Securities and Exchange Commission found evidence indicating that Do Kwon had illegally transferred almost $100 million worth of Bitcoin from Terra after the collapse. Additionally, according to a report published in South Korean media, based on an SEC interview with a former Terraform Labs employee, Kwon was accused of taking $80 million before the Terra ecosystem’s collapse.
The South Korean authorities have instructed Binance to prevent any withdrawal requests connected with Kwon. Binance has confirmed its cooperation with the prosecutors and has pledged to provide any necessary assistance.
South Korean prosecutors are actively searching for properties linked to Terraform Labs executives to recover illicit funds from the Terra debacle. On April 3, prosecutors seized homes and other assets to prevent former Terra employees from selling assets that might be connected to legal cases.
Apart from seizing the residences of former CEO Shin Hyun-seong and other executives in Seoul, the prosecutors also initiated foreclosure actions against their foreign-registered vehicles and lands in Hwaseong and Gapyeong in Gyeonggi-do, as well as Taean in South Chungcheong Province.
Terra was a thriving crypto ecosystem until its collapse in May 2022, valued at $40 billion. Initially believed to be a market-driven event, it was later discovered to be a clear case of fraud, with former CEO Kwon at the center. On-chain data indicates that one entity, Terraform Labs, sold over $450 million of UST stablecoin on the open market in the three weeks leading up to the depeg of TerraUSD. Four days after the last sale, UST began to collapse.
