Bitcoin / Crypto News / Cryptocurrency / Regulation · September 28, 2022

Korean Authorities Issue Orders Of Freezing Bitcoin Tied To Do Kwon

According to reports, South Korean authorities have reached out to crypto exchanges Kucoin and OKX and have requested them to freeze 3,313 Bitcoin (BTC).

This is because these coins are tied to the co-founder of the Terra blockchain, Do Kwon, and the developer of Terraform Labs.

The fugitive

A securities violation case had been filed against Kwon by the South Korean authorities and he is now believed to be on the run.

According to reports, just a day after an arrest warrant had been issued by the Korean authorities against the fugitive crypto founder, he had set up a new crypto wallet on September 15th.

Cryptoquant, the crypto analytic group, disclosed that a new wallet for Bitcoin had been created on September 15th and the name used for it was Luna Foundation Guard (LFG).

The said wallet had then made a transfer of 3,313 Bitcoins to the OKX and KuCoin exchanges. A total of 1,354 BTC to the KuCoin exchange, which had frozen them immediately after the transfer.

As far as the OKX exchange is concerned, it opted to ignore the request of the authorities and did not take any action.

This means that about 1,959 bitcoins were not frozen and they may have been moved to other platforms.

Kwon’s claims

Many eyebrows were raised in the crypto community at the transfer of Bitcoins from the LFG wallet because it is a direct contradiction to the early claims that Kwon had made.

He had stated that all Bitcoin reserves of the LFG had been used for defending the TerraUSD Classic (USTC) peg.

On September 14th, before the arrest warrant had been issued by the Korean authorities against Kwon, he had claimed that he was not under investigation and that the authorities had not contacted him.

This was despite the various reports about the investigations being carried out in South Korea. But, right after the release of the arrest warrant, reports indicated that the Terraform Labs’ founder had fled to Singapore.

The Red Notice

This forced the South Korean authorities to reach out to Interpol. A Red Notice had then been issued against Kwon by Interpol on September 26th, which confirmed his status as a fugitive.

However, even though there is a lot of evidence against him and an international notice has also been issued, Kwon continues to claim otherwise via tweets.

He recently said that his name was not mentioned on the Interpol website and added that he was not hiding.

Singaporean authorities have stated that he is not in the city-state, but his location on Twitter continues to be Singapore.

The collapse of the Terra ecosystem saw $60 billion wiped out from the crypto market in one go, as the algorithmic stablecoin UST as well as the luna token became almost worthless.

It resulted in a contagion that spread through the market and despite being responsible, Kwon continues to garner support from the crypto community in general because he claims his innocence.