Do Kwon Laundered Stolen Funds Through Bitcoin

Cryptomode Money Laundering Young Money Mules Do Kwon BKEX

South Korean prosecutors have recently discovered that Do Kwon, co-founder of Terraform Labs, and his associates are involved in illicit financial activities amounting to 414.5 billion won (approximately $314.2 million). Of this staggering amount, around 91.4 billion won ($69 million) has been directly connected to Kwon himself.

Despite the significant value of these assets, South Korean authorities are unable to recover them, as Kwon reportedly converted most of the illicit funds into Bitcoin through overseas cryptocurrency exchanges. 

According to a report published by South Korean daily KBS, this strategic move allowed him to avoid investing in physical assets that the authorities could seize.

Binance Collaborates with South Korean Prosecutors 

To control the damage and recover some of the funds, South Korean prosecutors have reached out to Binance, requesting a halt on any withdrawals associated with Do Kwon. Binance statedthat they are providing the requested assistance and will continue supporting the investigation.

As the investigation continues, prosecutors diligently track properties and assets connected to Terraform Labs executives to recover some of the illicit funds involved in the Terra-Luna scandal. 

On April 3, several homes and assets were seized to prevent former Terra employees from selling items that may be connected to legal cases.

Seizing Assets and Filing Foreclosure Actions in Pursuit of Justice

In addition to seizing residences in Seoul owned by former CEO Shin Hyun-seong and others, prosecutors have also filed foreclosure actions against foreign-registered vehicles, lands in Hwaseong and Gapyeong in Gyeonggi-do, and Taean in South Chungcheong Province.

Terra Luna was once a thriving cryptocurrency ecosystem built on the algorithmic stablecoin Terra-USD Classic (UST). However, when the stablecoin depegged in May 2022, the $40 billion ecosystem collapsed within days.

Initially believed to be a market-triggered event, the collapse was later revealed to be a clear fraud case, with former CEO Kwon at the center of the controversy. On-chain data indicates that a single entity dumped over $450 million of USTC on the open market three weeks following the depeg. 

Just four days after their last sale, UST began to collapse, and it was discovered that the entity behind the massive dump was Terraform Labs.

Do Kwon’s Capture and the Ongoing Legal Battle

Despite an arrest warrant issued by South Korean authorities and an Interpol red notice against him, Kwon managed to evade arrest for nearly a year. However, his luck ran out on March 23, when he was finally apprehended in Montenegro.

As the legal battle unfolds, South Korean prosecutors remain committed to recovering the illicit funds and bringing those involved in the Terra-Luna scandal to justice. With the help of Binance and other key players, pursuing justice in this high-stakes case continues to gain momentum.

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