Do Kwon pooled his funds into Bitcoin, South Korean prosecutors
South Korean prosecutors tried for some time to recover the funds from Terraform Labs co-founder Do Kwon and his associates. In the wake of continued efforts, prosecutors succeed in identifying the assets linked to the Terra (LUNA) network fall, guilty.
As the investigation progressed, prosecutors confirmed that Do Kwon and his associates had 414.5 billion South Korean won, (equivalent to about 314.2 million USD.) Of this, at least 91.4 billion won, or 69 million USD, belong to Kwon alone .
Even after so many efforts, the South Korean authorities were unable to confiscate the assets belonging to Kwon. These attempts to recover losses after the Terra (LUNA) network collapsed were unsuccessful – given that the assets belonging to Kwon were outside their jurisdiction.
Kwon allegedly took a majority of the stolen funds and converted them to Bitcoin (BTC). He put the funds through crypto exchanges working in countries other than South Korea. Both conditions made it quite challenging for the authorities to recover these assets.
However, South Korean law enforcement agencies were reported to be contacting several crypto exchanges with requests to disable the accounts related to Do Kwon.
The Terra (LUNA) network collapsed in May 2022, after the network’s native algorithmic stablecoin Terra USD (UST) lost its link to the US dollar. The collapse of the Terra network was a significant hit to the broader cryptocurrency industry. At the time of the collapse, the stablecoin had a huge market capitalization of USD 40 billion.
Stablecoins are generally meant to stay around a certain value, which is the value of its associated asset. The support makes them exposed to high volatility and the ideal assets to trade while taking advantage of blockchain technology’s offerings.
The fall of UST was significant enough to put a big hole in the burgeoning asset class market. This case rocked the broader crypto industry and it also started a ripple effect that served as a potential cause behind several big names in the industry in the following days.
Initially, the occurrence was considered to be an event triggered by the market sentiments against crypto, which was struggling with the crypto winter at the time. However, it soon became clear that the fall of the network was not entirely accidental.
On-chain data suggested, about several weeks before when UST lost its link, that a huge amount of stablecoin worth over 450 million USD worth was dumped into the market. Upon investigation, the sale was identified as initiated by Terraform Labs itself.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional money exchange systems. She is also fascinated by the blockchain technology and its function.
