Prosecutors Track Millions of Illicit Funds Linked to Do Kwon & Terraform Labs
Apr 7, 2023
Crypto & Blockchain
Prosecutors in South Korea are tracking illicit funds tied to Do Kwon, the co-founder of Terraform Labs, and his associates. According to a recent probe, they discovered 414.5 billion won ($314.2 million) in unlawful assets, out of which around 91.4 billion won ($69 million) can be directly linked to Kwon. Even though a considerable amount of money is associated with Kwon, the South Korean authorities are facing difficulties recovering the assets as he reportedly transformed them into Bitcoin via overseas exchanges.
KBS, a local media outlet, recently published a report regarding Do Kwon, the co-founder of Terraform Labs, and his involvement in the illegal conversion of funds. According to the report, Kwon converted a significant portion of the illicit funds into Bitcoin instead of investing in physical assets. This has made it difficult for the South Korean authorities to recover the assets, as they are not under their jurisdiction. Furthermore, the United States Securities and Exchange Commission (SEC) investigation into Terra's collapse revealed that Kwon had siphoned off nearly $100 million worth of Bitcoin from Terra after the collapse.
The SEC investigation further disclosed that Kwon was accused of siphoning $80 million each month before the Terra ecosystem collapsed. Following these revelations, South Korean prosecutors have been actively pursuing properties linked to Terraform Labs executives in an effort to recover some of the illicit funds associated with the Terra debacle. However, the recovery process remains challenging, given the decentralized and pseudonymous nature of cryptocurrencies like Bitcoin.
Despite the difficulties, the South Korean authorities are committed to their investigation into the Terraform Labs co-founder's activities. Their efforts have included tracing the flow of funds and properties associated with the case, as well as seeking cooperation from international agencies. The case highlights the challenges that come with regulating and investigating cryptocurrencies, which often operate beyond traditional jurisdictions and can be difficult to track.
South Korean prosecutors are leaving no stone unturned in their efforts to bring justice to the Terraform Labs scandal. As part of their investigation, the authorities have seized homes and other assets to prevent former Terra employees from selling properties that might be linked to legal cases. Among the assets seized are residences in Seoul, which were owned by former CEO Shin Hyun-seong and others. Additionally, prosecutors have filed foreclosure actions against foreign-registered vehicles, lands in Hwaseong and Gapyeong in Gyeonggi-do, and Taean in South Chungcheong Province.
After almost a year of evading arrest, Do Kwon, co-founder of Terraform Labs, was finally apprehended in Montenegro on March 23, 2023. The South Korean authorities had been investigating Kwon and Terraform Labs for fraud, which led to the collapse of the Terra crypto ecosystem. The investigation revealed the scale of the fraudulent activities committed by Kwon and his associates.