Swiss Authorities Freeze $26M Worth of Do Kwon, Terraform Labs Crypto Assets: Report

Swiss authorities have reportedly frozen approximately $26 million in Bitcoin and other cryptos tied to Terraform Labs, its founder Kwon Do-hyeong, and other key figures within the company.

These crypto assets were stored in the Swiss-based digital asset bank Sygnum, according to a report from South Korean news outlet Digital Asset on Saturday, citing unnamed authorities and investigators.

Per Digital Asset, Swiss authorities followed requests from the U.S. federal prosecutors of New York and the Securities and Exchange Commission.

Decrypt has contacted the Office of the Attorney General of Switzerland and will update this article should we receive a response.

This development is the latest chapter in a saga that started with the collapse of Terraform Labs’ algorithmic stablecoin, UST, in May 2022.

Kwon is accused by the U.S. and South Korean prosecutors of fraud, securities law violations, and several other charges related to the collapse of Terra. While admitting that mistakes were made, Kwon continues to argue he had no intent to deceive investors.

Do Kwon sentenced to jail

Last week, Kwon and Chang-joon Han, the former chief executive officer of Terraform Labs, were sentenced to four months in prison by a Montenegrin judge on charges relating to the forgery of travel documents.

The two were arrested in March at Montenegro’s Podgorica Airport while attempting to fly to Dubai, as per the court statement. During their arrest, authorities confiscated falsified documents including two Costa Rican passports, two Belgian passports, and two identity cards.

Both Kwon and Han pleaded not guilty at their first court hearing in May. The Montenegrin upper court decided to grant bail to each of them at $437,000, proposing house arrest under police supervision in the interim.

The next step for Kwon remains unclear. Both the U.S. and South Korea have sought to extradite him. In February, the U.S. Securities and Exchange Commission (SEC) charged Kwon and Terraform with defrauding U.S. investors who purchased Terra USD and LUNA tokens.