Singaporean Authorities Start Probing Terraform Labs and Do Kwon: Report

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Key takeaways:

  • Local Singaporean officials declared they had opened an investigation into Do Kwon’s Terraform Labs.
  • Do Kwon is away from Singapore, according to the authorities.

There has been an investigation launched into the firm Terraform Labs, which Do Kwon, a crypto fugitive, was a co-founder, according to the Singapore police department.

An email from Singaporean police on March 6 stated that “investigations have begun in connection to Terraform Labs,” according to a Bloomberg report. According to the email, inquiries are “ongoing,” and Do Kwon is not present in the city-state.

A new fraud lawsuit was filed by the US Securities and Exchange Commission (SEC) against Kwon and Terraform Labs just a couple of days ago. Some critics in the cryptocurrency community have criticized the case as a pretext for the SEC to sue stablecoins in the future. Even attorneys in the field have referred to the SEC’s assessments of assets as “wild.”s

According to the SEC investigation, Kwon removed about 10,000 Bitcoin from the Terra platform and the Luna Foundation Guard, which he later changed to fiat. Since the platform’s original collapse, the SEC claims that Kwon has laundered over $100 million of Bitcoin.

The Terra USD (UST) stablecoin lost its peg to the US dollar in May 2022, which is when the entire drama began. A significant implosion in the market for digital assets resulted from the Terra ecosystem’s later collapse, with losses of close to $40 billion.

Authorities in South Korea have also looked into Terraform Labs, and there is an arrest order out for Kwon. In an attempt to find Kwon, South Korean police went to Serbia. On February 15, South Korean authorities asked for a warrant to detain a local e-commerce executive who they claim accepted Terra (LUNA) in exchange for endorsing Terra Labs.

Kwon, who is wanted by South Korean officials, has been missing for almost a year. He first left his country for Singapore in April 2017 before moving on to Serbia, where he is currently believed to be. Do Kwon is away from Singapore, according to the authorities there.

A wave of companies in the cryptocurrency sector filed for bankruptcy after TerraUSD’s collapse last year, including the hedge fund Three Arrows Capital and the crypto lenders Voyager and Celsius.

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