Prosecutors investigating failed blockchain firm Terraform Labs have found out that its Singapore office sent millions of U.S. dollars to lawyers just before the crash of its cryptocurrencies. According to Korean media, the transfers suggest that co-founder Do Kwon was aware of the imminent collapse.
Terraform Labs Transferred Large Amounts of Money to South Korean Law Firm Prior to Crash
South Korean prosecutors working on the fraud case against Terraform Labs co-founder and CEO Do Kwon have revealed that the company has paid a total of 9 billion won (nearly $7 million) to Kim & Chang, the country’s leading law firm, national broadcaster KBS reported.
Tracking financial flows from its Singapore headquarters, they were able to establish that the funds were sent in several transactions which started right before the collapse of Terraform’s digital currencies, stablecoin terrausd and cryptocurrency luna, in May of last year.
Investigators from Seoul are cooperating with law enforcement authorities in Singapore to confirm the source of the payments. If it turns out that the blockchain firm has cashed out digital coins, charges of embezzlement may be brought against its management.
The report suggests that Terraform’s chief executive was aware in advance of the possibility of the crypto ecosystem collapsing and likely prepared certain legal moves in response to expected judicial risks such as the current investigation.
The full amount quoted by the KBS was allegedly transferred to Kim & Chang over a period of a few months. The South Korean prosecutors believe that if the funds stem from criminal proceeds they can be frozen and eventually seized.
It has been estimated that around 200,000 people bought Terraform’s cryptocurrencies and suffered heavy losses when their collapse erased billions of dollars in market value.
Do Kwon (Kwon Do-Hyung) was arrested by authorities in Montenegro in March, together with the company’s Chief Financial Officer Han Chang-joon, while trying to leave for Dubai. He is going to stand trial in the Balkan nation for traveling on false documents, before Podgorica considers his extradition to either South Korea or the United States, where he is charged with masterminding the crypto fraud.
Do you think South Korean authorities will be able to seize the money transferred by Terraform to the law firm? Tell us in the comments section below.
from Bitcoin News https://ift.tt/PlTE7v3
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