- Recent data reveals significant Bitcoin transfers associated with Terraforms Labs and its co-founder, Do Kwon.
- There’s a noticeable uptick in cryptocurrency transfers linked to Kwon post his Montenegro detention.
- The SEC intensifies its case against Terraform Labs, while Kwon’s future remains in the balance due to potential legal actions.
Reports have come forward about significant transfers of Bitcoin and other cryptocurrencies by Terraforms Labs and its co-founder, Do Kwon. This massive movement of digital assets has led experts to speculate if these funds are being pooled for potential legal battles.
Last month, news sources from South Korea highlighted that individuals close to Do Kwon initiated the selling of Bitcoin connected with the Luna Foundation Guard. This followed the shifting of 5,292 BTC into a different cryptocurrency wallet. It’s intriguing to note that despite his current stay in Montenegro, Kwon hasn’t paused his cryptocurrency operations. From the aforementioned Bitcoin lot, a chunk of 239 BTC was shifted, with Kwon or his trusted circle seen executing more such transactions.
After his Montenegro detention, these digital currency transfers have increased. It’s also worth mentioning that Terraform Labs moved tokens from Convex Finance, valued around $8.7 million. Updated figures show a digital wallet named “bc1qs6” now holds Bitcoin equivalent to $146 million, post its recent transfer from another wallet labeled “bc1q42.”
Furthermore, the United States Securities and Exchange Commission (SEC) has pinpointed that after certain issues surrounding Terra-LUNA, a covert relocation of 10,000 BTC to a safer digital wallet took place. Kwon has been active in transferring Bitcoin from this wallet to the cryptocurrency bank, Sygnum, turning these assets into cash by the millions.
The SEC’s legal case against Terraform Labs continues to escalate. Recently, Kwon’s and Terraforms Labs’ legal representatives tried to question the SEC lawsuit’s validity, referencing a past ruling from Judge Torres in the SEC’s Ripple Labs case. But, Judge Rakoff rejected this plea, ruling the previous decision irrelevant to the current scenario.
Moreover, a Montenegro court had declared Kwon guilty for using a fake passport, sentencing him to four months. His next steps, however, are muddled. Several countries, including the US and South Korea, plan to pursue Kwon concerning alleged scams tied to Terraform Labs’ decline. Extradition looks difficult as Montenegro lacks official extradition agreements with these countries.
Post-release, there’s chatter suggesting Montenegro’s apex court might deport Kwon to South Korea. If charged there, the Terra leader could be looking at a long jail term, spanning possibly four decades.
Terra’s Missteps Still Haunt the Crypto Sector
Terra Labs, once a significant player in the crypto market, plunged into turmoil. Investors reeled as more than 2,000 of them decried deceptive marketing practices by Binance.US involving Terra’s stablecoin, TerraUSD (UST). Promises of UST’s unwavering $1 value and high yield potential were shattered when the SEC highlighted CEO Do Kwon’s exaggerations about returns and the coin’s stability.
The woes did not stop there. May 2022 saw a cataclysmic event likened to a bank run, causing UST and Luna’s value to evaporate, leading many to label Terra a “Ponzi scheme”. This collapse erased nearly $500 billion from the crypto market. Amidst attempts to rebrand with Terra 2.0, the company is besieged by lawsuits, with Kwon’s whereabouts now a mystery due to an Interpol red notice.
