Prosecutors investigating failed blockchain startup Terraform Labs have found that its Singapore office sent millions of US dollars to lawyers just before its cryptocurrency crash. According to Korean media, the transfers suggest that co-founder Do Kwon was aware of the impending collapse.
Terraform Labs transferred large amounts of money to a South Korean law firm before the accident
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 top law firm, to national broadcaster KBS. reported.
By tracking financial flows from its Singapore headquarters, they were able to establish that the funds were sent in several transactions that began just before the collapse of Terraform’s digital currencies, the terrausd stablecoin and the luna cryptocurrency, in May of last year.
Seoul investigators are cooperating with Singaporean law enforcement authorities to confirm the origin of the payments. If it turns out that the blockchain firm has cashed in digital currencies, embezzlement charges may be brought against its management.
The report suggests that the Terraform CEO was aware of the possibility of the crypto ecosystem collapsing and likely prepared certain legal moves in response to expected legal risks, such as the current investigation.
The entire amount quoted by KBS was allegedly transferred to Kim & Chang over a period of a few months. South Korean prosecutors believe that if the funds come from criminal proceeds, they may be frozen and eventually seized.
It has been estimated that around 200,000 people bought Terraform’s cryptocurrencies and suffered heavy losses when its collapse wiped out billions of dollars in market value.
Do Kwon (Kwon Do-Hyung) was arrested by the Montenegrin authorities in March, along with the company’s CFO Han Chang-joon, as they tried to leave for Dubai. He will stand trial in the Balkan nation for traveling with false documents, before Podgorica considers extraditing him to South Korea or the United States, where he is accused of masterminding the crypto fraud.
Do you think the South Korean authorities will be able to seize the money transferred by Terraform to the law firm? Tell us in the comment section below.
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