Controversial Terraform Labs co-founder Do Kwon has allegedly attempted to cash out 3,313 BTC associated with him. South Korean authorities urgently requested crypto exchange platforms Kucoin and OKX to freeze his BTC after they discovered he created a new wallet on September 15, a day after an arrest warrant was released against the Terra CEO.
Cryptoquant, a crypto analysis group, discovered that a new wallet, labeled Luna Foundation Guard (LFG), was generated. It held 3,313 BTC (~$67 million) and was transferred to OKX and KuCoin.
KuCoin approved the authorities’ request and declared that the platform received 1,354 BTC, quickly frozen after the trade. Meanwhile, OKX declined the request. This means that the remaining 1,959 BTC can still move to different platforms.
As of press time, both KuCoin and OKX have not elaborated on the confirmation of the transferred cryptocurrencies to the media.
Do Kwon’s Suspicious Behavior
The LFG wallet’s BTC transfer caused all aware individuals to be suspicious of Do Kwon’s decision. Before the new wallet, he claimed he spent all the remaining BTC to keep the TerraUSD Classic (USTC) peg using tLFG.
Before the September 14 arrest warrant, Kwon claimed and tweeted that he was not under indictment, nor did Korean feds contact him, even though numerous South Korean reports say otherwise. Yet, even when he said he was not being investigated, Do Kwon retreated to Singapore.
South Korean authorities sought Interpol’s assistance to ensure he does not escape from the financial crimes he committed last May. On September 26, Kwon was issued a red notice from Interpol. When Interpol posts an individual under the Red Notice, the local enforcement must find the person and apprehend them “pending extradition, surrender, or similar legal action.”
Yet, the official website did not show Do Kwon on the Interpol page, which made him tweet, “For something that has noticed in the name, it sure gives no notice.”
However, while his name was not on the official site, Twitter username @tier10k said, “Interpol: The majority of Red Notices are not made public and are restricted to law enforcement use only.”
Korean enforcers have also issued arrest warrants for five other undisclosed associates involved in the UST depeg and LUNA crash, violating South Korean capital market laws.
The Events Before the Arrest Warrant
On September 17, Singaporean authorities reported that Do Kwon was not staying in Singapore despite social media and independent news outlets saying he was there. During that time, Do Kwon tweeted he was never running away from the police.
Before the pursuit, the Terra ecosystem was responsible for $40 billion in losses, destroying almost a trillion dollars in the cryptocurrency market. This caused widespread panic in LUNA, UST, and other crypto holders, which made headlines all over mainstream news.
After the collapse, Do Kwon forked the failed LUNA and UST into Terra Classic (LUNC) and Terra USD Classic (USTC). He created the second version of LUNA, but this time without needing an algorithmic stablecoin.