South Korean prosecutors have begun looking into failed blockchain firm Terraform Labs after uncovering evidence of a substantial payment to an esteemed law firm just before its digital assets plummeted. According to Korean media, the transfers suggest that co-founder Do Kwon was aware of the impending collapse.
Terraform Labs Sent a Large Sum of Money to South Korean Law Firm Before Crypto Prices Dropped
South Korean prosecutors looking into the fraud case against Terraform Labs co-founder and CEO Do Kwon have reportedly found that the company transferred 9 billion won (close to $7 million) to Kim & Chang, the nation’s top law firm, national broadcaster KBS stated.
Tracing financial flows from its Singapore headquarters, investigators were able to trace the payments which began shortly before the crash of Terraform’s digital currencies, stablecoin terrausd and cryptocurrency luna, in May of last year.
Experts from Seoul are coordinating with law enforcement in Singapore to verify the origin of the funds. If it turns out that the blockchain firm cashed out crypto coins, charges of misappropriation may be brought against its executives.
The report suggests that Terraform’s chief executive had knowledge of the probability of the crypto ecosystem crumbling and likely set in motion certain legal moves in response to potential legal risks such as the current inquiry.
The full amount mentioned by the KBS was supposedly transferred to Kim & Chang over a period of several months. The South Korean prosecutors suspect that if the capital stem from criminal profits they can be frozen and eventually seized.
It is estimated that approximately 200,000 purchasers acquired Terraform’s cryptocurrencies and incurred huge losses when their crash eliminated billions of dollars of market value.
Do Kwon (Kwon Do-Hyung) was arrested by authorities in Montenegro in March, along with the firm’s Chief Financial Officer Han Chang-joon, while trying to flee to Dubai. He will stand trial in the Balkan nation for traveling on false documents, before Podgorica considers his extradition to either South Korea or the United States, where he is charged with engineering the crypto fraud.
Do you think South Korean authorities will be able to freeze the money sent by Terraform to the law firm? Let us know in the comments section below.
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