Do Kwon Merged His Funds into Bitcoin, South Korean Prosecutors

South Korean prosecutors were attempting for a while to recover the funds from Terraform Labs co-founder Do Kwon and his associates. In the wake of continued efforts, the prosecutors succeed in identifying the assets related to the Terra (LUNA) network fall, culprits. 

As the investigation moved further, prosecutors confirmed that Do Kwon and his acquaintances were having 414.5 billion South Korean won, (equivalent to about 314.2 million USD.) Out of this, at least 91.4 billion won, or 69 million USD, belongs to Kwon alone. 

Even after so many efforts, South Korean authorities were unable to confiscate the assets belonging to Kwon. These efforts to recover the losses after the Terra (LUNA) network collapse were unsuccessful– given the assets belonging to Kwon were out of their jurisdiction. 

Kwon reportedly took a majority of stolen funds and converted them into Bitcoin (BTC). He put the funds through crypto exchanges working in countries other than South Korea. Both conditions made it quite challenging for authorities to recover these assets. 

However, South Korean law enforcement agencies were reported to reach out to several crypto exchanges with requests to make the accounts related to Do Kwon, inoperable. 

Terra (LUNA) network collapsed in May 2022, after the network’s native algorithmic stablecoin Terra USD (UST) lost its peg from US dollars. The collapse of the Terra network was a significant hit for the broader cryptocurrency industry. At the time of its collapse, the stablecoin had a huge market capitalization of 40 billion USD. 

Stablecoins are generally meant to stick around a certain value, which is the value of its pegged asset. The backing makes them prone to heavy volatility and the ideal assets to trade while taking advantage of blockchain tech’s offerings. 

The fall of UST was significant enough that it put a huge hole in the burgeoning asset class market. This instance shook the broader crypto industry and it also started a ripple effect which acted as a potential reason behind several big names in the industry in the following days. 

Initially, the instance was considered to be an event triggered by the market sentiments towards crypto, struggling with the crypto winter at the time. However, soon it was clear that the fall of the network was not completely unintentional. 

On-chain data suggested, about several weeks prior when UST lost its peg, a massive amount of stablecoin worth over 450 million USD worth was dumped in the market. After investigation, the sale was identified to be initiated by Terraform Labs itself. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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