Singapore Police Launch Investigation into Crypto Fugitive Do Kwon and Terraform Labs – Where is He?
Authorities in Singapore have launched a probe into Do Kwon’s Terraform Labs, the entity that developed the now-collapsed TerraUSD stablecoin.
According to a Monday report by Bloomberg, Singapore’s police sent an email announcing that “investigations have begun in relation to Terraform Labs.” It added that inquiries are “ongoing” and Kwon is currently not in the city-state.
The announcement comes less than a month after the US Securities and Exchange Commission (SEC) sued Terra founder Do Kwon and his organization Terraform Labs for securities fraud.
“[The SEC] today charged Singapore-based Terraform Labs PTE Ltd and Do Hyeong Kwon with orchestrating a multibillion-dollar securities fraud involving an algorithmic stablecoin and other crypto-asset securities,” the commission said at the time.
The SEC also claimed that Kwon and Terraform Labs transferred over 10,000 Bitcoins out of their project and have withdrawn via a Swiss bank.
Kwon is the co-founder and CEO of Singapore-based Terraform Labs, the company that developed the TerraUSD stablecoin. The so-called algorithmic stablecoin was meant to have a constant $1 value via a mix of algorithms and trader incentives involving a sister token, Luna.
However, the stablecoin lost its dollar peg last May after a wave of selling hit the crypto market. While Terraform Labs was able to partially repair the link by buying $2B UST, continued selling of those funds drained it, hyper-inflating UST’s sister token LUNA and crashing the price of both LUNA and UST.
Where is Do Kwon?
After the catastrophic collapse of the Terra ecosystem, South Korean officials launched an investigation into the project when investors filed a complaint against Kwon. Last September, the country issued an arrest warrant for Do Kwon.
In December, South Korean prosecutors claimed Do Kwon was “hiding” in Serbia, and asked the European nation’s police force to hand him over to them. Prosecutors said he had moved to Serbia via Dubai in September, having left South Korea for Singapore around the time of the crash.
Kwon is wanted on charges of breaching the Capital Markets Act and fraud, charges which he denies and has called “politically motivated”. But so far he has neither confirmed nor denied the suggestion that he has taken up residence in Serbia.
Some experts have previously argued that Serbia could be a potential hiding place for Kwon because the country has never signed an extradition treaty with South Korea. Without this, experts say South Korean prosecutors could be in a tight spot.
Earlier this year, a group of South Korean officials traveled to Serbia in an attempt to find Do Kwon. The prosecutor’s office in Seoul confirmed the news, noting that a senior Justice Ministry official also accompanied the delegation.
In particular, the latest wave of bankruptcies that hit crypto companies largely stemmed from the collapse of TerraUSD. Following the crash of the project, a number of high-profile crypto firms, including FTX and Three Arrows Capital, filed for bankruptcy.
