The collapse of Terraform Labs’ native token, LUNA, and algorithmic stablecoin, UST, in May 2022, was a devastating blow to investors, wiping out a total of $60 billion. The fallout led to some people taking their own lives, and authorities were quick to blame Do Kwon, the co-founder of Terraform Labs.
According to recent reports, Kwon had transferred 9 billion won (approximately $6.9 million) to South Korean law firm Kim & Chang shortly before the collapse. While the law firm acknowledged receiving the payment, they were hesitant to provide any additional information on the matter, citing client confidentiality.
Kwon, who had been on the run for almost a year, was finally detained in March 2023 at the airport in Montenegro. South Korean prosecutors are now investigating whether Kwon played a role in the LUNA/UST collapse.
The revelation of Kwon’s payment to Kim & Chang has raised further questions about the collapse. Some experts have suggested that the payment could be linked to Kwon’s efforts to conceal his involvement in the collapse or to fund his escape from authorities.
The investigation into the Terra collapse is ongoing, and Kwon’s extradition to South Korea or the United States is yet to be determined. However, the recent developments have shed new light on the events leading up to the collapse and have potentially provided a crucial piece of evidence for prosecutors.
The Terra collapse serves as a reminder of the dangers associated with investing in cryptocurrencies and the need for greater regulation in the sector. The collapse not only led to significant financial losses but also had a devastating impact on the lives of those affected. It is essential for investors to exercise caution and do their due diligence before investing in any cryptocurrency.