In recent reports, South Korean prosecutors have announced that they have identified 10 individuals, including Do Kwon, the co-founder of Terraform Labs, involved in a major cryptocurrency fraud case. The investigation led to the discovery of 414.5 billion won ($314.2 million) in illicit assets, with about 91.4 billion won ($69 million) directly linked to Kwon.
Kwon, now under arrest, reportedly converted most of the illicit funds, about $100 million worth of Bitcoin, into overseas crypto exchanges instead of investing in physical assets. The authorities have requested Binance to halt any withdrawal request associated with Kwon, and Binance has acknowledged that they are collaborating with the authorities and providing all the necessary support.
This latest development in the Terraform Labs case comes after the ecosystem’s collapse in May 2022, which was initially believed to be a market-triggered event. However, it turned out to be a clear fraud case, with Kwon at the epicenter.
On-chain data has revealed that a single entity sold over $450 million worth of UST on the open market during the three weeks leading up to the depeg of TerraUSD stablecoin. It has been discovered that this entity was linked to Terraform Labs, the now-infamous company behind the $40 billion Terra collapse.
In response to the scandal, South Korean prosecutors have taken action to trace the assets of Terraform Labs executives to recover illicit funds. On April 3, the authorities seized homes and other assets in Seoul, Hwaseong, Gapyeong, and Taean to prevent former Terra employees from selling assets that may be linked to legal cases.
This case highlights the need for tighter cryptocurrency industry regulations to prevent fraud and illicit activities. It also underscores the importance of working with authorities to recover illicit funds and bring those responsible to justice.
