Terraform Labs CEO Sends Millions to Law Firm Before Collapse
South Korean prosecutors have confirmed that Terraform Labs CEO, Do Kwon, sent 9 billion won ($7 billion) to Kim & Chang, a top South Korean law firm, right before the spectacular collapse of the Terra ecosystem. This move by Kwon has been flagged by prosecutors as deliberate, reaffirming his awareness of the impending collapse and anticipated legal problems.
The Terra ecosystem, a blockchain-based payments platform, was launched in 2018 by Terraform Labs. The company’s cryptocurrency, LUNA, reached an all-time high in November 2021 before experiencing a sharp drop. Following this, Terraform’s system became unstable, leading to a spectacular collapse of the ecosystem.
KBS News reported that prosecutors believe Kwon’s decision to send millions to the law firm was a deliberate move to prepare for the anticipated legal issues that would arise following the collapse of the Terra ecosystem. Prosecutors are now trying to tie Kwon’s ill intent in prepaying the law firm, and they believe the information will help in the ongoing fraud case.
In addition to Kwon’s payment to the law firm, lawyers from Kim & Chang also visited Montenegro to meet with Kwon and Terraform’s former chief financial officer, Han Chang-joon. Kwon was later arrested at Podgorica airport in Montenegro after trying to fly to Dubai using fake documents. Following his arrest, both United States and South Korean authorities have sought Kwon’s extradition. However, the court is yet to decide.
On April 7, South Korean prosecutors revealed that they suspected Kwon of converting illicit funds from Terra (LUNA) to Bitcoin (BTC). The prosecutors requested Binance, a cryptocurrency exchange, to halt all withdrawal requests linked to Kwon.
Prosecutors have identified over $314 million in illicit assets associated with Terraform Labs co-founder Kwon and his associates, out of which about $69 million is reportedly directly linked to Kwon. The ongoing investigation is likely to reveal more information, shedding light on the Terra ecosystem’s collapse and the role played by Kwon and his associates.
In summary, Terraform Labs CEO Do Kwon’s prepayment of millions to a South Korean law firm right before the collapse of the Terra ecosystem has raised suspicions among prosecutors that his actions were deliberate. Prosecutors suspect Kwon of converting illicit funds from Terra to Bitcoin and have identified over $314 million in illicit assets associated with Kwon and his associates. The investigation is ongoing and is likely to reveal more information on the collapse of the Terra ecosystem and Kwon’s role in it.