South Korean authorities have discovered $314.2 million in illicit assets linked to Do Kwon, Terraform Labs' co-founder. Additionally, prosecutors have directly related about $69 million of the specified amount to Kwon.
Kwon is said to have converted the majority of the illicit funds into Bitcoin using offshore cryptocurrency exchanges, rendering them unrecoverable and outside the jurisdiction of South Korean authorities, Cointelegraph explains in a report.
Authorities Continue to Trace Illicit Funds
The authorities have already asked Binance to halt any withdrawal requests related to Kwon. The exchange has confirmed cooperating with prosecutors and providing any assistance they require.
Prosecutors are actively tracing properties associated with Terraform Labs executives in order to recover some of the ill-gotten gains from the Terra-Luna fiasco.
Terra Luna was a thriving cryptocurrency ecosystem built around the algorithmic stablecoin Terra-USD classic (USTC). However, the stablecoin imploded in May 2022, resulting in the $40 billion ecosystem collapsing within days. Former CEO Kwon is said to be the mind behind the fraud.
After months of hiding, Do Kwon, the founder of Terraform Labs, was arrested in Montenegro in late March. Kwon reportedly attempted to flee Dubai with forged documents when apprehended at Podgorica Airport in Montenegro's capital.
What Authorities Discovered
According to on-chain data, one entity dumped over $450 million in USTC on the open market in the three weeks preceding the depeg, and USTC began collapsing four days after their last sale. Terraform Labs was the organization responsible for the massive dump.
Despite a South Korean arrest warrant and an Interpol red notice against his name, Kwon eluded capture for nearly a year before being apprehended on March 23 in Montenegro.
Cointelegraph tells us that South Korean authorities have seized homes and other assets to prevent former Terra employees from selling items that may be connected to legal cases.
The prosecutors also filed foreclosure proceedings against their foreign-registered vehicles and lands in Gyeonggi-Hwaseong do's, Gapyeong, and Taean in South Chungcheong Province.
Binance, the world's largest cryptocurrency exchange by trading volume, is assisting the authorities and has cooperated with them. However, the exchange cannot comment on ongoing investigations and has directed journalists to contact prosecutors for further information.
South Korean authorities continue investigating the Terra-Luna scandal and are working hard to recover some illicit funds associated with Do Kwon and his associates.
The case emphasizes the importance of regulatory oversight in cryptocurrency to prevent fraudulent activities and protect investors from losing money.
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The Terra-Luna fiasco is one of the largest cryptocurrency fraud cases involving millions of dollars in illicit assets linked to Do Kwon and his associates. This led investigators to discover similar crypto-related fraud cases in the following months.
The South Korean government is working to recover some assets and bring the perpetrators to justice. Still, the case also highlights the importance of regulatory oversight in the cryptocurrency industry.
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