Key facts:
- Do Kwon is currently in custody in Montenegro.
- The former CEO is awaiting extradition to the US or South Korea, his native country.
Lawyers for Do Kwon, the former CEO of Terra, were awarded $7 million just before the collapse of the Terra and Luna cryptocurrencies in May last year, according to a recent report.
The victims of the collapse have called for an investigation, according to KBS News, alleging that it was a financial fraud. The South Korean prosecutor’s office is investigating the flow of funds from Terraform Labs’ Singapore headquarters and has found that around 9 billion won were remitted to Kim & Chang, Korea’s largest law firm. The monetary transfers, moreover, would have been made several times just before the accident.
Prosecutors and Singapore police authorities are tracing the origin of this money. They are also paying attention to the fact that the remittances started “just before the crash,” suggesting that former CEO Kwon was aware of the possibility of a crash beforehand and prepared legal responses. Taking into account that the collapse of Terra and LUNA occurred in May 2022, as reported by Market Times.
Choi Chang-min, a lawyer, told KBS that “the fact that they sent a large sum of money to a large law firm before the accident could be seen as a situation where they were prepared for legal risks, such as investigation of the prosecution”. In other words, a court could see Kwon’s attempt to seek legal protection as bad intentions, before the official collapse of the platform.
It should be noted that the accused, Do Kwon, is currently detained in Montenegro, after being arrested on March 23, trying to enter the country with false documentation.
Law firm Kim & Chang reportedly sent lawyers to Montenegro to meet with Do Kwon due to his current legal situation, raising suspicions that the former CEO was aware of the situation.
It is estimated that around 200,000 people bought the Terra stablecoin, as well as the Luna token, before and after the accident, thus losing their money. CEO Kwon has not compensated the victims yet. The Korean prosecutor’s office is investigating whether more funds were siphoned off before the crash. The possibility of recovering the total funds transferred to the Kim & Chang firm is also being discussed, as part of the investigation, which is still ongoing.
