It appears that things are only going to get worse for disgraced Terra founder Do Kwon. A Wednesday report revealed that South Korean prosecutors had managed to freeze some 233.3 billion Korean won, worth about $176 million, in Kwan’s personal assets as criminal proceedings against the former TerraForm Labs CEO continued.
Kwon’s fund freeze
South Korean authorities have seized Do Kwon’s assets.
Yoon Chan-young, chief judge of the 12th Criminal Division of the Seoul Southern District Court, approved prosecutors’ request to freeze Kwon’s property, local publication Hankyung reported on May 10. The properties in question include the Galleria Foret apartment complex in Seongdong-gu, Seoul, a new officetel in Nonhyeon-dong, and several imported cars.
The judge also prohibited the sale of Kwon’s financial assets, such as securities held at Mirae Asset Securities, deposits at Woori Bank and crypto assets stored in personal wallets on exchanges.
South Korean law states that suspects are prohibited from disposing of illegally obtained property or income until proven guilty.
Last week, the director of the Joint Financial Crimes of Seoul Southern District told wall street journal Kwan faces up to 40 years behind bars if found guilty – the longest sentence given for a financial crime in South Korea’s history.
From crypto ‘genius’ to alleged crypto scammer
The spectacular collapse of Terra’s Luna and UST algorithmic stablecoins in May 2022 was a major catalyst for the crypto industry’s crypto winter, with the prices of bitcoin and other cryptocurrencies plummeting and many high-profile players such as Three Arrows Capital becoming Went. Bankrupt.
Kwon was infamously compared to Elizabeth Holmes, who promised Theranos investors far more than she could deliver.
In mid-February this year, nearly 9 months after the Terra ecosystem was nipped in the bud, the US Securities and Exchange Commission (SEC) filed civil charges against Kwon and his now-defunct Singapore-based firm TerraForm Labs for securities fraud.
The SEC claims that for starters, TerraForm Labs worked with US-based trading firms to create the illusion that the UST’s self-balancing algorithm actually worked to keep its price bound to one dollar. Through these relationships and through more direct techniques, the SEC said the beleaguered crypto founder and TerraForm frequently intervened in the market for Luna and TerraUSD.
Then, in March, came the news that everyone in the cryptosphere was really expecting. Officials in the small Balkan country of Montenegro revealed that their police had nabbed Do Kwon.
The detention was quickly confirmed by both South Korean law enforcement and Interpol. And within hours, US prosecutors slapped the South Korean national on eight counts of fraud, adding to civil charges previously filed by the SEC.
Both South Korea and the US are currently vying to extradite the crypto entrepreneur, once regarded as a genius.