South Korean prosecutors have identified 414.5 billion won ($314.2 million) in illicit assets associated with Terraform Labs co-founder Do Kwon and his associates. Of the $314 million in illicit assets identified, prosecutors tied about 91.4 billion won ($69 million) of the specified amount to Kwon.
Although Kwon has amassed millions, none of the assets linked to him are salvageable or under the jurisdiction of South Korean authorities. This is mainly because the now-arrested former CEO allegedly converted most of the illicit funds into Bitcoin (BTC) using overseas crypto exchanges instead of investing in physical assets, according to a report published in the South Korean daily KBS.
South Korean authorities have asked Binance to suspend any withdrawal requests associated with Kwon. Binance has confirmed to Cointelegraph that they are indeed cooperating with prosecutors and offering all the assistance they need.
“We have provided LE Korean authorities with the requested assistance. Since we cannot comment on ongoing LE investigations, for any further comments, please contact the prosecutors.”
South Korean prosecutors are actively seeking properties associated with Terraform Labs executives to recover some of the illicit funds from the Terra-Luna debacle. On April 3, prosecutors seized homes and other property in an effort to prevent former Terra employees from selling things that could be related to court cases.
In addition to residences in Seoul belonging to former CEO Shin Hyun-seong and others, prosecutors also filed foreclosure actions against their foreign-registered vehicles, land in Hwaseong and Gapyeong in Gyeonggi- do and Taean in South Chungcheong Province.
Related: Do Kwon faces fraud charges from US prosecutors hours after arrest
Terra Luna was a thriving crypto ecosystem based on the algorithmic stablecoin Terra-USD classic (USTC). However, the stablecoin broke down in May 2022, leading to a $40 billion ecosystem collapse within days.
What was initially considered a market-triggered event turned out to be a clear case of fraud, with former CEO Kwon at the center of it. According to on-chain data, in the 3 weeks prior to the depeg, one entity sold over $450 million USTC on the open market. 4 days after their last sale, USTC started crashing. And the entity behind the massive dump was none other than Terraform Labs.
TFL perpetuated the narrative that UST was “under attack”. This is a false flag. In reality, TFL themselves weakened the Curve pool by irresponsibly dumping a massive amount of UST in a short period of time. This reduced liquidity and severely weakened the peg.
— FatMan (@FatManTerra) December 6, 2022
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.