According to the Securities & Exchange Commission (SEC), Do Kwon and his company sent more than 10,000 Bitcoin out of his failing project. Moreover, it claims he converted some of these tokens into cash via a Swiss bank.
The SEC has filed a lawsuit against Do Kwon and his company, Terraform Labs Pte. It accuses him of fraud in connection with the collapse of the digital currencies he had created. The SEC has stated that this scheme resulted in losses of at least $40B.
The complaint claims that Terraform Labs and Kwon kept more than 10,000 Bitcoin in a supposed cold wallet. The wallet isn’t connected to any digital asset exchange.
According to the SEC, Kwon and Terraform Labs Pte have been periodically moving Bitcoin from the cold wallet to a Swiss bank since May of last year. They then converted these tokens into cash. The SEC hasn’t revealed the name of the financial institution. More than $100M in fiat currency has been taken out from the Swiss bank between June 2022 and the time of the complaint.
Do Kwon became highly sought after as the Terra scandal unfolded
Do Kwon is the mastermind behind TerraUSD. TerraUSD is a stablecoin that was designed to maintain a constant value of $1 through a mix of algorithms and trader incentives that involved a sister token called Luna. However, in May 2022, the system collapsed. This contributed to the downfall of several digital asset outfits and escalated a $2T decline in the cryptocurrency market.
Do Kwon cleared his tracks after South Korea issued an arrest warrant for him for suspected violations of capital market laws. South Korea has also declared that Kwon is the subject of an Interpol red notice.
Earlier this year, after speculations about his whereabouts, South Korean authorities traveled to Serbia to hunt Kwon down.
The 31-year-old entrepreneur and Terraform Labs have yet to respond to requests for comments on the lawsuit. Do Kwon has previously maintained his innocence.
