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 identified illegal assets, prosecutors have linked about 91.4 billion won ($69 million) of the specified amount directly to Kwon.
Although Kwon amassed millions of dollars, none of the assets tied to him have been recovered and are not within the jurisdiction of South Korean authorities. This is largely because the now-arrested ex-CEO reportedly converted most of the illicit funds into Bitcoin,
Use overseas cryptocurrency exchanges instead of investing in physical assets, according to a report published by local media outlet KBS.
An early SEC investigation into the Terra debacle revealed that Kwon stole nearly $100 million worth of bitcoin from Terra after the crash. In another report published by South Korean media based on SEC interviews with former Terraform Labs, Kwon was accused of pumping out $80 million a month before the Terra ecosystem collapsed.
South Korean authorities have asked Binance to stop any Kwon-related withdrawal requests. Binance confirmed to Cointelegraph that they are cooperating with prosecutors and providing any help they need. “We provided the requested assistance to South Korean LE authorities. As we are unable to comment on the ongoing LE investigation, please contact prosecutors for any further comment.”
Prosecutors in South Korea are aggressively pursuing properties tied to Terraform Labs executives in an effort to recover some of the illicit funds from the Terra debacle. On April 3, prosecutors seized homes and other assets in an effort to stop former Terra employees from selling things that might be relevant to the legal case. In addition to the residences of former president Shin Hyun-sung and others in Seoul, prosecutors also filed confiscation proceedings against their foreign-registered vehicles, land in Hwaseong and Gapyeong in Gyeonggi Province, and Taean in South Chungcheong Province.
Terra has been a thriving crypto ecosystem until its $40 billion market cap crash in May 2022. What was initially thought to be a market-driven incident turned out to be an apparent case of fraud, with former CEO Kwon at the center of it. According to on-chain data, in the 3 weeks leading up to the depeg of the TerraUSD (UST) stablecoin, one entity dumped over $450 million in UST on the open market. Four days after the last sale, UST started to crumble. The entity behind the massive dump is none other than Terraform Labs. Despite a warrant issued by South Korean authorities and an Interpol red notice issued against his name, Kwon continued to evade arrest for almost a year before being arrested in Montenegro on March 23.
