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South Korean Court Freezes $92M in Terra-Related Funds

Since Terra’s UST and LUNA coins collapsed, South Korean authorities have been investigating the case and scrutinizing the businesses whose activity was related to Terra. The latest action taken has been freezing as much as $92 million (120 billion won) in funds of former and incumbent CEOs of Terraform Labs’ affiliate firm Kernel Labs. As The Korea Economic Daily reported, the Seoul Southern District Court decided to confiscate the property of seven people involved in generating profit from selling pre-issued LUNA coins.

As per the Seoul Southern District Court, one of those taking the biggest advantage of Terra and speculating on sales was Kernel Labs CEO Kim Hyun-Joong. According to the reports from the authorities, Kim has illegally gained at least 79 billion won ($61 million). He made a few real estate purchases in South Korea last year. In November, he acquired a building in Gangnam-gu, which is the most expensive area in Seoul, for as much as 35 billion won ($27 million). Further, in June, he bought an apartment in Seongdong-gu for about 9 billion won ($7 million). As the investigation was unfolding, he was prohibited from leaving the country.

Notably, while Kim Hyun-Joong is in South Korea, authorities are looking for Do Kwon, the controversial CEO and founder of Terraform Labs. A few months ago, he left Singapore. Back in September, the South Korean government nullified the validity of Do Kwon’s passport. Afterward, Interpol issued a “Red Notice” declaring Kwon and his five accomplices wanted worldwide by law enforcement. As per the latest reports, South Korean prosecutors believe that Terra’s former CEO is now staying as a crypto fugitive in Serbia. We also reported that he wants to cooperate with the authorities from Serbia. However, it is unlikely that South Korea will be able to legally extradite Do Kwon from Serbia as the bilateral extradition agreement involved 31 countries, excluding Serbia.

While South Korea’s Ministry of Justice keeps requesting investigative assistance from the Serbian government, Do Kwon states he is not on the run and is open to communicating with the authorities.

Notably, the exact cause of TerraUSD and LUNA’s collapse is still unclear. Therefore, it is hard to predict how long the investigation will take. The collapse has been the biggest contagion in the cryptocurrency market in 2022. A lot of people got involved, and South Korean authorities are trying their best to find out the reasons and punish those involved.

At the moment, Sam Bankman-Fried, the founder of collapsed crypto exchange FTX and its sister trading platform Alameda Research, is also being investigated. US prosecutors believe that the FTX crash that took place in November intermingled with Terra’s collapse.

South Korean Court Freezes $92M in Terra-Related Funds

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