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- 1 Do Kwon is accused of transferring billions of dollars to a law firm right before Terra collapsed.
- 2 Reports claim that prosecutors met Do Kwon in Montenegro after his arrest.
Do Kwon, the Cofounder of failed Terraform Labs, is accused of sending 9 Billion won ($7 billion) to South Korean prosecutors. According to KBS News, the amount deposited in Kim & Chang’s account was from Terraform’s account.
The law firm held $314.2 Million as illicit assets linked with Terraform Labs’ Cofounder and other employees directly or indirectly. Out of $314.2 Million, some $69 Million were directly associated to Kwon.
The move of transferring funds right before the company’s collapse allegedly indicates that Kwon knew that his foundation was going to die and its time was close (two-three days.) The Cofounder claimS to have transferred the funds to the law firm to deal with upcoming legal problems after the collapse.
The media source reveals that the prosecutor of Kim & Chang visited Montenegro to meet Kwon after his arrest by the police administration. Reports also indicate that the prosecutor also talked with the former Chief Financial Officer of Terra Labs.
Earlier on March 24, TheCoinRepublic reported that Kwon was arrested in Montenegro with numerous forged documents. These included passports from Costa Rica and Belgium and a Hawaiian driver’s license.
Kwon was on the radar of the USA, Singapore, and South Korean authorities and the allegation that these countries imposed on Kwon were Fraud, Market Manipulation, Commodities Fraud, Securities Fraud and Conspiracy to Defraud.
Similarly, on April 8, TheCoinRepublic reported that Kwon allegedly took most of the stolen funds and converted them into Bitcoin (BTC). He put the funds through crypto exchanges working in countries other than South Korea. Both conditions made it quite challenging for authorities to recover these assets.
Market Scenario After Luna Crash
Terra Network collapse was the most catastrophic incident in the crypto industry. The native token of Terraform Labs lost its peg from US dollars in May 2022, and soon after, the depeg Luna value started collapsing.
At the time of the Luna crash, it held a total market capitalization of $40 Billion. According to an analysis firm, before UST lost its peg, a massive amount of UST tokens were dumped into the market worth $450 Million.
The fall of UST was significant enough to put a hole in the burgeoning asset class market. This instance shook the broader crypto industry and started a ripple effect which acted as a potential reason behind several big names in the industry in the following days.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
