Kofi Mensah Investigators looking into the downfall of Terraform Labs found out that its branch in Singapore sent huge amounts of cash to lawyers shortly before its digital coins crashed. According to Korean news reports, the transfers show that co-founder Do Kwon knew the company was going to fail.
Terraform Labs’ CEO Do Kwon Accused of Committing Cryptocurrency Crime
Investigators in South Korea looking into a scam involving Terraform Labs’ CEO Do Kwon told the national news station, KBS, that the company has spent almost $7 million on hiring Kim & Chang – the country’s top lawyers.
From their office in Singapore, they figured out that money was transferred before Terraform’s two digital forms of money (stablecoin terrausd and cryptocurrency luna) broke down in May last year.
People who work to solve problems in Seoul and the police in Singapore are teaming up to check where money came from. If it turns out that a blockchain company changed digital coins into real money, they might be accused of stealing.
The report suggests that the CEO of Terraform knew ahead of time there was a risk that the whole crypto system could fall apart and he had made plans to protect against any legal troubles, like the investigation happening now.
According to KBS, all the money was sent to Kim & Chang over several months. South Korean prosecutors think if the money comes from criminal activities it can be blocked and taken away.
About 200,000 people got tricked when they invested in Terraform’s cryptocurrencies because the whole thing fell apart and caused billions of dollars of losses.
Do Kwon and his company’s Chief Financial Officer Han Chang-joon were arrested in March while they were trying to go to Dubai. Both of them will have a trial in Montenegro because they got caught using fake papers. After the trial, they could be extradited either to South Korea or the United States where Do is accused of committing a cryptocurrency crime.
Do you think South Korea can get back the money Terraform sent to the lawyer? Let us know what you think in the comments below.
