Do Kwon was arrested in Montenegro nearly a year after his involvement in the LUNA crash.
South Korean prosecutors have presented evidence identifying 414.5 billion won ($314.2 million) of fraudulent funds linked with the founder of Terraform Labs Do-Kown and his associates.
Out of $314.2 million, nearly $69 million is linked directly to Kwon. It is also believed that he converted the majority of funds to Bitcoin days after the LUNA crash.
In late March 2022, Do Kwon was arrested in Seoul on allegations of fraud and embezzlement.
The Seoul Metropolitan Police Agency’s Financial Investigation Division accused Kwon of fraudulently inflating the value of Terra cryptocurrency and then selling it to investors.
Kwon is also alleged to have embezzled funds from Terraform Labs and to have transferred company assets to his personal accounts.
Following Kwon’s arrest, Terraform Labs released a statement confirming that Kwon had been suspended from his role as CEO and that the company was cooperating fully with the investigation.
The company also stated that the arrest did not affect the functionality of the Terra blockchain or its associated cryptocurrency.
As of the latest case update, in early April 2023, Do Kwon is still awaiting trial. He has been arrested by Montenegro police and serving jail time while waiting for extradition. The trial date has not yet been set, but it is expected to take place in the coming months.
The case has generated significant attention in South Korea, where the cryptocurrency market is particularly active. Some experts have raised concerns about the impact that the allegations against Kwon could have on the reputation of the broader blockchain industry in the country.
In the meantime, Terraform Labs has appointed an interim CEO and continues to develop and expand its blockchain technology.
The company has also reiterated its commitment to transparency and accountability, stating that it is taking steps to strengthen its internal controls and ensure that such incidents do not occur in the future.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.