Do Kwon, the creator of the collapsed Terraform Labs, allegedly tried to remove $69 million in Bitcoin (BTC) immediately following a warrant that was issued for his arrest.
Prosecutors in South Korea claim that soon after the South Korean law enforcement signed an arrest warrant for Do Kwon on the 14th of September, he tried to steal almost $69 million from the Luna Foundation Guard fund. Do Kwon founded the LFG, a non-profit group, to protect the cost of Terra (LUNA).
According to the claims, LFG allegedly launched a Binance wallet on September 15. 3313 Bitcoin (BTC) were then transferred from LFG to wallets made on the Kucoin and OKX platforms shortly after that. Over the course of three days, roughly 1354 Bitcoin (BTC) of the transferred assets were moved to Kucoin, and then to OKX, 1959 Bitcoin (BTC).
The assets have been requested to be frozen by the exchanges by the Seoul Southern District Prosecutors’ Office. In conjunction with the Securities Crimes Joint Investigation Team, they have been looking into the case. KuCoin has pledged to abide by the order and freeze the funds, but OKX has not answered. The full compliance of both exchanges in this regard cannot be anticipated, nevertheless, as none are based in Korea.
In response to the issue, a prosecutor’s office representative said: “In a normal criminal investigation, if a large amount of money is moved from the suspect’s account after the issuance of an arrest warrant, it is natural to conduct an intensive investigation with suspicion of laundering and concealment. We must first check whether it will be used as an evacuation fund.”
As the algorithmic stablecoin TerraUSD (UST) lost its peg to the US Dollar causing a market-wide crash and the loss of $40 billion in investor cash, South Korean law enforcement has been on Do Kwon and they are getting closer. Do Kwon is now sought not just by the arrest warrant but also by Interpol for the crimes committed.
The CEO of Terraform Labs responded to the claims of shifting money, after remaining largely silent on social media following the scandal. He refuted the accusations and said he had not used the communications in question in the previous year. Do Kwon tweeted shortly after it was discovered that he had tried to withdraw money from LFG, “What has been probably the most surprising in all this is the amount of misinformation that gets spread. There is no “cashout” as alleged, I haven’t used kucoin or OKX in at least the last year, and no funds of TFL, LFG, or any other entities have been frozen.”