Do Kwon converted stolen funds from Luna to Bitcoin: S. Korean prosecutors
South Korean prosecutors have identified 414.5 billion won ($314.2 million) in illegal assets linked to Terraform Labs co-founder Do Kwon and his associates. Of the $314 million in illegal assets identified, prosecutors have linked about 91.4 billion won ($69 million) of the specified amount to Kwon.
Although Kwon amassed millions, none of the assets linked to him are recoverable or under the jurisdiction of South Korean authorities. This is primarily because the now-arrested former CEO allegedly converted most of the stolen funds into Bitcoin (BTC) using foreign crypto exchanges instead of investing in physical assets, according to a report published in South Korean daily KBS.
South Korean authorities have asked Binance to stop any withdrawal requests related to Kwon. Binance confirmed to Cointelegraph that it is indeed cooperating with the prosecutors and offering all the help they need.
“We provided Korean LE authorities with the requested assistance. As we cannot comment on ongoing LE investigations, please contact the prosecution for further comment.”
South Korean prosecutors are actively tracking properties linked to Terraform Labs executives to recover some of the illegal funds stolen from the Terra-Luna debacle. On April 3, prosecutors seized homes and other assets in an effort to stop former Terra employees from selling items that may be related to the lawsuits.
In addition to the Seoul residences owned by former CEO Shin Hyun-seong and others, prosecutors also filed enforcement actions against their foreign-registered vehicles, lands in Hwaseong and Gapyeong in Gyeonggi-do, and Taean in South Chungcheong Province.
Related: Do Kwon faces fraud charges from US prosecutors hours after his arrest
Terra Luna was a thriving crypto ecosystem based on the algorithmic stablecoin Terra-USD classic (USTC). However, the stablecoin was depegged in May 2022, leading to a collapse of the $40 billion ecosystem within days.
What was initially believed to be a market-triggered event turned out to be a clear case of fraud, with former CEO Kwon at the center. According to data from the chain, in the three weeks leading up to the defunding, one unit dumped over $450 million USTC on the open market. 4 days after their last sale, USTC began to collapse. And the entity behind the massive dump was none other than Terraform Labs.
Despite an arrest warrant from South Korean authorities and an Interpol red notice against his name, Kwon continued to evade arrest for nearly a year before being caught on March 23 in Montenegro.
