South Korean prosecutors are currently investigating Terraform Labs co-founder Do Kwon and his associates for their alleged involvement in the conversion of stolen funds from Luna to Bitcoin. The prosecutors have identified over $314 million in illicit assets linked to Kwon and his associates, with about $69 million of the specified amount being linked directly to Kwon himself.
According to a report by the South Korean daily KBS, Kwon reportedly converted most of the stolen funds into Bitcoin using overseas crypto exchanges instead of investing in physical assets. This has made it difficult for S.Korean authorities to recover any of the stolen funds, as none of the assets tied to Kwon are recoverable or under their jurisdiction.
Do Kwon Probe Intensifies as Prosecutors Widen Investigation
As part of their investigation, South Korean authorities have requested that Binance halt any withdrawal request associated with Kwon. Binance has confirmed that they are cooperating with the prosecutors and providing any assistance required. The exchange also said that as the ongoing investigation cannot be commented on, any further inquiries should be directed to the prosecutors.
Despite the challenges in recovering the stolen funds, South Korean prosecutors are actively tracing properties associated with Terraform Labs executives in an effort to recover some of the illicit funds. On April 3, prosecutors seized homes and other assets owned by former CEO Shin Hyun-seong and others in an effort to stop them from selling things that might be tied to legal cases.
Terra Luna was a popular crypto ecosystem that was based on the algorithmic stablecoin Terra-USD classic (USTC). However, the stablecoin depegged in May 2022, leading to a collapse of the $40 billion ecosystem within days. It was later revealed to be a clear case of fraud, with former CEO Kwon at the center of it.
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 getting caught on March 23 in Montenegro. As the investigation continues, it remains to be seen whether any of the stolen funds will be recovered or if Kwon and his associates will be held accountable for their alleged involvement in the conversion of stolen funds from Luna to Bitcoin.
