According to a report from Bloomberg, South Korean prosecutors, who have been working to trace the missing crypto assets, said Kwon possibly moved $29 million worth of crypto by himself or someone did it on his behalf.

Read Also: Terra Classic (LUNC) Price Prediction as SEC Sues Terra Founder Do Kwon for Multiple Frauds

The report reads in part:

“We’re assuming that Do Kwon, or someone under his direction, took out the amount and moved it to another wallet, not to Sygnum, and cashed it out somewhere else. We are tracking it.”

Kwon was first arrested in Montenegro in March after attempting to board a flight to the United Arab Emirates (UAE) with a Costa Rican passport, which authorities say was allegedly forged. Kwon pleaded not guilty in May in a Montenegro court to charges of forging travel documents.

Authorities in both the United States and South Korea want to extradite the Terra founder, who is facing multiple charges arising from the $40 billion crash of the Terra ecosystem stablecoin TerraUSD (UST) and the crypto asset Terra (LUNA) now renamed Terra Classic (LUNC).

Read Also: Do Kwon Is Set To Integrate Terra Classic (LUNC) and Cosmos Chain Projects into Terra Station: Details

Kwon claimed on Twitter in February that he’d “stolen no money and never had ‘secret cashouts.’” He also said he was “happy to address any specific allegations” – though it remains unclear if he’s ever addressed the allegations in any public forum.

I find that Twitter is a good place for rumors but poor place to get facts

I've stolen no money and never had "secret cashouts" – happy to address specific allegations

In any case, good day to you

— Do Kwon (@stablekwon) February 1, 2023

Dan Sunghan, director of the financial crime investigation bureau at the Seoul Southern District Prosecution Service, informed Bloomberg that Kwon could serve more than 40 years in prison if found guilty of the charges.

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Do Kwon, the co-founder and CEO of TerraForm Labs, took to Twitter on Friday to announce his intention to arrange a mild meetup conference in the coming days. He noted that cops around the world are welcome to attend the probable gathering.

According to him, the goal is to clear the air in relation to rumors that he went into hiding following the collapse of the TerraClassicUSD(USTC) and Terra Classic (LUNC) in May. But it’s worth noting that Kwon has been mildly demonstrating support for the now community-driven Terra Classic (LUNC) project to aid its revitalization.

In the thread of tweets, he added that the intended event would also discredit the claims that he is on the run and trying hard to evade arrest warrants from South Korean authorities, Interpol, and other crime-related departments.

Related: Do Kwon Answered Questions on Everyone’s Mind in the Latest Interview: Details

He wrote, “Alright, I’ll throw a meetup/ conference soon to get over this in-hiding bs.” Cops from all over the world are welcome to attend, he included. 

“For those of you that have been spreading falsehood on the taxpayer’s dime, you are invited with VIP honors – will even pay for your plane ticket. Show up if you dare,” Kwon thundered. 

Alright ill throw a meetup/conference soon to get over this in hiding bs

Cops from world over welcome to attend

— Do Kwon (@stablekwon) November 3, 2022

The Terra founder went further to reiterate that the Terra collapse investigation launched by Korean authorities is highly politicized.

*makes up complete bullshit for political reasons*

Not true?

*Claims sovereign immunity*

— Do Kwon (@stablekwon) November 3, 2022

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An earlier report detailed that Korean prosecutors investigating the most significant crypto crash in history requested two popular cryptocurrency exchanges, including Kucoin and OKX, to freeze about $67 million worth of Bitcoin (BTC) that were reportedly linked to Do Kwon and the Singapore-based non-profit Luna Foundation Guard (LFG). 

The Luna Foundation Guard took to Twitter on Wednesday to debunk the claims that its funds were frozen and/or transferred from its treasury for laundering or to facilitate its Kwon’s hiding as widely speculated. The LFG added that the foundation hasn’t created any new wallets since the collapse incident nor transferred any BTC. 

“The LFG treasury’s $BTC wallet is bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q. LFG hasn’t created any new wallets or moved $BTC or other tokens held by LFG since May 2022,” the tweet read. 

The LFG treasury’s $BTC wallet is:

bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q

LFG hasn’t created any new wallets or moved $BTC or other tokens held by LFG since May 2022.@CoinDesk @iamsandali @cryptoquant_com https://t.co/VFN8A4mJRo

— LFG | Luna Foundation Guard (@LFG_org) September 27, 2022

In like manner, CEO Do Kwon refuted the statements that assets linked to him, TerraForm Labs, or Luna Foundation Guard (LFG) were frozen by any exchange citing misinformation. He added that he hasn’t traded on either Kucoin or OKX in a long while.

He said, “What has been probably the most surprising in all this is the amount of misinformation that gets spread. There is no “cashout” as alleged, I haven’t used Kucoin or Okex in at least the last year, and no funds of tfl, LFG or any other entities have been frozen.”

What has been probably the most surprising in all this is the amount of misinformation that gets spread.

There is no “cashout” as alleged, i havent used kucoin or okex in at least the last year, and no funds of tfl, lfg or any other entities have been frozen. https://t.co/E1cbKgoqQz

— Do Kwon (@stablekwon) September 28, 2022

Read Also: Terra Founder Do Kwon Would Soon Become an Illegal Migrant in Singapore. Here’s Why

While it is a widespread belief that the Terra founder is dodging arrest from South Korean authorities, he had earlier disclosed that he is making no effort to hide. “I am not “on the run” or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide,” he said. 

In a recent discovery, Do Kwon has rejected the capital-markets law charges from the Korean authorities claiming that the case has become “highly politicized.” According to Bloomberg, “a spokesperson for the firm said in a statement that prosecutors had demonstrated “unfairness and a failure to uphold basic rights guaranteed under Korean law,” adding that there’s “no reasonable basis” for their accusation of breaches of capital-markets law.

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Korean-based Crypto Exchanges Raided

Reportedly, South Korean prosecutors in charge of the Terra collapse case embarked on a search and seizure exercise at several headquarters of domestic cryptocurrency exchanges on Wednesday.

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The cryptocurrency exchanges raided by the authorities included Upbit, Bithumb, Coinone, Korbit, and Gopax other two exchanges. Also, a search and seizure warrant has been executed at 8 other locations in connection with the fall of TerraUSD (UST) and old LUNA. These places include the homes and offices of people involved in the case, according to Yonhap News Agency.

Related: Terra (LUNA) Key Officials Face Travel Ban in Korea

Per the report, the Joint Financial and Securities Crime Investigation Team, have obtained vital information such as transaction details involving the old LUNA token courtesy of the foray. These obtained transaction details could be useful in solving the case. 

“The investigation team plans to analyze the seized material and then question witnesses before determining the size of the damage and whether the coins’ collapse was caused intentionally by Kwon, among other potential irregularities,” the news added. 

Related: Terra (LUNA) Crash Investigation: The United States and Korea Collaborate

Terra Investigation Continues

Recall that, in May, LUNA and TerraUSD (UST) issued by Do Kwon’s Terraform Labs dropped to an all-time low. Consequently, about $45 billion was erased from the market while many investors were badly wrecked. More so, sources claim that over 200,000 domestic investors suffered losses due to the Terra collapse. 

In consequence, several lawsuits have been filed against Do Kwon and TerraForm Labs by affected investors. Meanwhile, different investigations have been channeled towards the company. Recently, the United States and the Korean government agreed to collaborate, and share data related to the Terra investigation.

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A lot has been said about Kwon, his crypto project, and the failure of the two digital assets (LUNA and UST) built on top of Terra blockchain.

It can be recalled that the Korean Tax Authority alleged that Kwon’s company is owing nearly $80 million in taxes. He was also accused of a calculated dissolution of his firm in Korea days before the massive crash.

Read Also: Do Kwon Amends Terra 2.0 Proposal When Voting Still in Progress. Aggrieved Members Right All Along?

The Shut Down Is Purely Coincidental

According to a report, Kwon dissolved his company’s Busan headquarters on the 4th of May and the Seoul branch office on the 6th of May, while the crash of Terra (LUNA) and TerraUSD (UST) became critical on the 12th of May.

In this regard, a supposed Terra community member challenged Kwon to respond to the allegation.

Reacting to the allegation as requested, Terraform Labs founder said the timing is purely coincidental, stating that he has made it known in several interviews and podcasts that he wants to relocate the company to Singapore.

Do Kwon tweeted, “I’ve been in Singapore since last December – this is a personal decision and has long been planned. I’ve been open about being located in Singapore across multiple interviews and podcasts. Shutting down a company just takes some time, and timing is purely coincidental.”

I’ve been in Singapore since last December – this is a personal decision and has long been planned. I’ve been open about being located in Singapore across multiple interviews and podcasts

Shutting down a company just takes some time, and timing is purely coincidental

— Do Kwon (@stablekwon) May 21, 2022

Clarifying further, he said, “Terraform Labs HQ has always been incorporated in Singapore and is still active and in good standing. We just no longer have a Korean subsidiary.”

Read Also: Terra Founder Do Kwon Shares Plan to Rescue UST Stablecoin Peg Following Historic Crash

Do Kwon Refutes Reports about Owing Nearly $80 Million in Taxes

In the same thread of tweets, Do Kwon also refuted reports that Terraform Labs owes about $80 million in taxes to the South Korean government.

According to Kwon, the company has no outstanding tax to pay in Korea.

Do Kwon wrote, “We have no outstanding tax liabilities in Korea. The NTS did conduct a tax audit across all the major crypto cos with a presence in Korea and applied Korean tax code to foreign mother companies, and every company ended up paying as a result – we paid in full. Not unique to TFL.”

We have no outstanding tax liabilities in Korea

The NTS did conduct a tax audit across all the major crypto cos with a presence in Korea and applied Korean tax code to foreign mother companies, and every company ended up paying as a result – we paid in full

Not unique to TFL

— Do Kwon (@stablekwon) May 21, 2022

Since the problem with the Terra ecosystem began, Do Kwon has been attracting massive negative attention. It was even reported that he’s being harassed at home, which brought about requesting police protection.

Over the past couple of days, Terra validators have been working to get around the issues with the blockchain. Attempts to proffer lasting solutions have even divided the community. A set of Terra community members want massive token burns, while Do Kwon and his team of developers suggest hard-forking to create a new blockchain.

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After the collapse of Terra (LUNA) and TerraUSD (UST) stablecoin, Do Kwon proposed the rebirth of LUNA without UST, which will create Luna (LUNA) 2.0 tokens on a new blockchain.

Although a huge part of the community members, including Binance CEO CZ, see massive LUNA tokens burn as the best solution, he sees hard forking as the only viable option.

Read Also: Mike Novogratz Breaks Silence on Terra Collapse, Speaks on Galaxy Digital’s Investment in LUNA

Do Kwon Amends His Terra 2.0 Proposal

Today he amended the proposal despite the fact that the original plan is currently going through an on-chain vote. While this so-called “rebirth” proposal still stands, Kwon stated that he edited a few distribution parameters to accommodate community feedback.

Do Kwon noted:

“Some details of the token allocation have been modified in the proposal to accommodate community feedback – changes and reasoning outlined here. The proposal body has also been edited to reflect the changes in the amendment. If you’ve already voted and disagree with the changes, please vote “No” – you have 5 more days to do so.”

The first change reduces the distribution of LUNA 2.0 tokens to UST holders who has their tokens staked on Anchor when the depeg happened. Their distribution share was reduced from 20% to 15%.

Read Also: Terra (LUNA) Supply Nears 7 Trillion, Can LUNA Still Reach $1?

The second alters the vesting schedule for two of the stakeholder categories that have been proposed to receive a share of the new tokens. Here, Kwon increased the initial token unlocks of allocations of LUNA 2.0 tokens from 15% to 30%, with the remaining 70% locked for a two-year vesting period.

Proposal Amendment Unusual During an On-Chain Vote

It’s unusual for a proposal to be amended amid an on-chain vote. The changes initiated by Kwon have led some to question the validity of the proposal. Any change intended for a proposal is usually done beforehand and not during the vote.

FatMan, a pseudonymous Terra analyst pointed out that a new proposal should emerge with a fresh vote.

FatMan tweeted, “What the hell? How can you make significant amendments to a proposal *mid-vote* when most people have already voted (for the original document)? A new proposal in Terra Station should be made with a fresh vote. This is not cool. (No comment on the changes – just the execution.)”

What the hell? How can you make significant amendments to a proposal *mid-vote* when most people have already voted (for the original document)? A new proposal in Terra Station should be made with a fresh vote. This is not cool. (No comment on the changes – just the execution.) https://t.co/SeFpc78Sab

— FatMan (@FatManTerra) May 20, 2022

Read Also: Ethereum’s Vitalik Buterin: Terra Should Prioritize Smallholders in Any Proposed Reimbursement Plan

Terra Investors Alleged Ongoing Voting Is Being Rigged By Do Kwon

Kwon’s original proposal went to a validator vote about two days ago. And negative reactions have been trailing the voting process since it went live.

According to data on Terra Station, out of the 185.26 million votes recorded so far, 147 million votes are in favor of the proposal (77.52%), while “No with Veto” takes 17.64% of the total votes.

Due to the massive margin between “Yes and No”, some Terra investors who oppose the creation of a new blockchain are alleging that the voting process is being rigged by Kwon.

It should be noted that if the ‘no with veto’ percentage crosses 33.4%, the entire proposal would be scrapped without considering the whopping margin.

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Terra has been devising a number of means to get the blockchain back on track following the fiasco that led to the crash of its two native tokens, LUNA and UST.

Read Also: Terra Founder Do Kwon Shares Plan to Rescue UST Stablecoin Peg Following Historic Crash

In a series of tweets a few hours ago, Kwon said, “Neither I nor any institutions that I am affiliated with profited in any way from this incident.” He also urged the community to remain patient as teams juggle multiple tasks to bring the blockchain back to normalcy.

Do Kwon tweeted, “I’ve spent the last few days on the phone calling Terra community members – builders, community members, employees, friends and family that have been devastated by UST depegging. I am heartbroken about the pain my invention has brought on all of you.”

1/ I’ve spent the last few days on the phone calling Terra community members – builders, community members, employees, friends and family, that have been devastated by UST depegging.

I am heartbroken about the pain my invention has brought on all of you.

— Do Kwon (@stablekwon) May 13, 2022

Do Kwon further said:

“I still believe that decentralized economies deserve decentralized money – but it is clear that $UST in its current form will not be that money.

“Neither I nor any institutions that I am affiliated with profited in any way from this incident. I sold no luna nor ust during the crisis.

Read Also: I’m Disappointed in Terra Team, Says CZ, As He Explains Why Binance Delists LUNA and UST

“We are currently working on documenting the use of the LFG BTC reserves during the depegging event. Please be patient with us as our teams are juggling multiple tasks at the same time.

“There are multiple proposals on Agora on the best steps to move forward for the community – after having read many of them, I’ve put down my thoughts of what I think the best steps are:

“What we should look to preserve now is the community and developers that make Terra’s blockspace valuable – I’m sure our community will form consensus around the best path forward for itself, and find a way to rise again.”

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According to CoinMarketCap, Terra (LUNA) experienced a massive crash of over 90% within the last 24 hours, while his TerraUSD (UST) is now 75% below $1.

With all these predicaments, Kwon exhibits no fear due to his rescue plans.

In a series of tweets today, Kwon said his team will increase basepool from 50M to 100M SDR and decrease PoolRecoveryBlock from 36 to 18. He expects this to increase minting capacity from $293 million to around $1200 million ($1.2 billion). This will enable the team to mint four times more UST than usual.

Do Kwon tweeted, “Dear Terra Community: I understand the last 72 hours have been extremely tough on all of you – know that I am resolved to work with every one of you to weather this crisis, and we will build our way out of this.”

2/ I understand the last 72 hours have been extremely tough on all of you – know that I am resolved to work with every one of you to weather this crisis, and we will build our way out of this.

Together.

— Do Kwon (@stablekwon) May 11, 2022

In the thread of tweets, Kwon further said as follows:

“A review of the current situation: UST is currently trading at 50 cents, a significant deviation from its intended peg at $1.

“The price stabilization mechanism is absorbing UST supply (over 10% of total supply), but the cost of absorbing so much stablecoins at the same time has stretched out the on-chain swap spread to 40%, and Luna price has diminished dramatically absorbing the arbs.

“Before anything else, the only path forward will be to absorb the stablecoin supply that wants to exit before $UST can start to repeg. There is no way around it. We propose several remedial measures to aid the peg mechanism to absorb supply:

“First, we endorse the community proposal 1164 to Increase basepool from 50M to 100M SDR *) Decrease PoolRecoveryBlock from 36 to 18. This will increase minting capacity from $293M to ~$1200M. This should allow the system to absorb the UST more quickly.

“With the current on-chain spread, peg pressure, and UST burn rate, the supply overhang of UST (i.e., bad debt) should continue to decrease until parity is reached and spreads begin healing.

“Naturally, this is at a high cost to UST and LUNA holders, but we will continue to explore various options to bring in more exogenous capital to the ecosystem & reduce supply overhang on UST.

“As we begin to rebuild UST, we will adjust its mechanism to be collateralized.

“The Terra ecosystem is one of the most vibrant in the crypto industry, with hundreds of passionate teams building category defining applications within. As long as these builders, TFL among them, continue to build – we will come out of this together.

“Terra’s focus has always oriented itself around a long-term time horizon, and another setback this May, similar to last year, will not deter the #LUNAtics. Short-term stumbles do not define what you can accomplish. It’s how you respond that matters.

Terra’s return to form will be a sight to behold. We’re here to stay. And we’re gonna keep making noise.”

It’s currently unclear why Kwon wrote “$1200M” instead of $1.2 billion. Some of those who reacted to the announcement are of the opinion that it’s meant to lessen the negative impact of the problem.

Reacting to the development, Adil Abdulali, Head of Portfolio Management for Securitize Capital, said UST is an algorithmic stablecoin and is not backed by cash reserves.

To sound a note of warning, he said, “Unlike other stablecoins such as USDC and Tether, UST is an ‘algorithmic’ stablecoin and is not backed by cash reserves. Comparatively, Circle ensures USDC stability with each USDCoin backed by one US Dollar, highlighting the importance of choosing the right stablecoin.”

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Do Kwon, Terra founder revealed that the stablecoin issuer is on the cusp of purchasing $3 billion worth of Bitcoin, following his announcement that Terra’s major plan is to accumulate $10 billion in BTC.

Read Also: MIT Researcher Urges United States: Buy Bitcoin (BTC) Now To Become a Superpower for Next 1000 Years

Kwon tweeted, “It’s not $10 billion today – as UST money supply grows a portion of the seigniorage will go to build BTC reserves bridged to the Terra chai. We have $3 billion funds ready to seed this reserve, but technical infrastructure (bridges etc) is still not ready yet.”

Kwon also told Udi Wertheimer in an interview that it’s safer to establish reserves in Bitcoin (BTC), the largest cryptocurrency by market capitalization, than any other crypto asset. According to the CEO, Bitcoin will backstop short-term UST redemptions.

Do Kwon noted:

“It’s the only asset with a provably calcified and hard code base and much better distributed than all the other digital assets. So it makes sense to think about using Bitcoin as a hard currency…

“The basic schema is very simple. We’re exploring a number of different bridges to be able to move Bitcoin into Terra in a trustless, nonwrapped fashion. And let’s assume that Bitcoin is available in tokenized form on Terra, with the mechanics thereof still being researched.

Read Also: Largest Independent Bitcoin Whale Holding $5.1B Has Started Accumulating BTC in Millions of Dollars

“In that case, what we would do is we would put it into a smart contract whereby people can trade in UST to get roughly a dollar’s worth of Bitcoin. So let’s say minus 1% off or minus 2% off, and people can mint UST by trading in Bitcoin against the reserve at par value.

“So at any given time, you can trade in a dollar’s worth of tokenized Bitcoin on Terra and then get one UST, and then you can trade in one UST for slightly less than a dollars’ worth of Bitcoin.”

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