Terraform Labs

Terraform’s Do Kwon mounts last-ditch effort to avoid extradition: Report

Lawyers for Terraform Labs co-founder Do Kwon have mounted a final attempt to appeal his extradition from Montenegro.

Terraform Labs co-founder Do Kwon has launched his final attempt to appeal a Montenegrin court’s decision that could see him extradited from the country.

In a Dec. 6 report, local state media stated that lawyers for Kwon had officially appealed the Nov. 24 decision from the High Court of Podgorica, which approved that Kwon could be extradited to either the United States or South Korea pending a final decision by the Montenegrin Ministry of Justice.

The Ministry of Justice will now consider the appeal and reexamine the initial extradition order and is currently slated to make a final decision on the matter by Dec. 15.

Terra co-founder Daniel Shin’s arrest denied by court, citing low flight risk

Shin currently faces multiple fraud charges, specifically concerning allegedly hiding risks associated with investing in the in-house tokens by Terraform Labs.

A local court in South Korea denied the prosecutor’s request to issue an arrest warrant for Terraform Labs co-founder Shin Hyun-Seong, also known as Daniel Shin. This was the second attempt made by South Korean authorities to reign in Shin following the recent arrest of Do Kwon — Terra’s other co-founder.

On March 23, Kwon was arrested at Podgorica airport in Montenegro while attempting to use fake documents to fly abroad. The Seoul Southern District Prosecutors Office took advantage of this situation and, on March 27, requested an arrest warrant for Shin, citing his involvement in cashing in illicit profits from Terra (LUNA) and TerraUSD (UST) sales.

However, the Seoul Southern District Court denied the request while citing unconfirmed allegations and the unlikeliness of Shin being a flight risk or destroying evidence, according to local media Yonhap.

Shin currently faces multiple fraud charges, specifically in relation to allegedly hiding risks associated with investing in the in-house tokens by Terraform Labs.

Following Kwon’s arrest in Montenegro, authorities from both the United States and South Korea have tried to extradite the entrepreneur.

As Cointelegraph reported, Montenegrin Justice Minister Marko Kovač said the U.S. made diplomatic efforts to ask for Kwon to be handed over, while South Korean officials have requested extradition.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

“In the case when we receive several extradition requests, I would like to say that determining to which state they will be extradited is based on several factors like the severity of the committed criminal offense, the location and time when the criminal offense has been committed, the order in which we have received the request for extradition and several other factors,” said Kovač through an interpreter.

FBI, NY authorities probes collapse of TerraUSD stablecoin: Report

The controversial founder of Terraform Labs, Do Kwon, is at the center of the investigation, despite being believed to be hiding out in Serbia.

The United States Justice Department is reportedly investigating the collapse of the TerraClassicUSD (USTC) stablecoin, which contributed to a $40 billion wipeout in the Terra ecosystem last May.

Two agencies within the department — the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Southern District of New York — have interrogated former staff at Terraform Labs in recent weeks, according to a March 13 The Wall Street Journal report.

The probe covers similar ground to a lawsuit filed against Terraform Labs and its founder Do Kwon by the U.S. Securities Exchange Commission on Feb. 16, according to people familiar with the matter.

Among topics that investigators have asked about was the relationship between Chai, a South Korean-based payment platform, and the Terra blockchain on which USTC operated.

The SEC alleged in its filing alleged that Kwon misled investors into believing that Chai transactions were processed on the Terra blockchain.

*Do Kwon speaking at a conference about Terra before LUNC and USTC collapsed. Source:* *Terra*

The SEC in its lawsuit also accused Kwon of misleading investors about the risks of the algorithmic-based stablecoin, which is designed to be pegged 1:1 to the U.S. dollar.

It is unclear what specific charges the Justice Department is potentially pursuing. The investigation does not necessarily mean that charges will be filed.

Since the collapse, Kwon reportedly left South Korea for Singapore, Dubai, and now Serbia, where he is now believed to be, according to South Korean officials. Two South Korean authorities were recently sent to Serbia to find Kwon but were unsuccessful in their search attempts.

Kwon, however, claims he is not “on the run” despite the South Korean prosecutors issuing Kwon an arrest warrant on Sept. 14 and a red notice filed by Interpol, the global law enforcement agency, on Sept. 26.

Kwon told podcaster Laura Shin in October that he hasn’t seen a copy of the South Korean arrest warrant, and has continued to deny fraud allegations on social media.

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

— Do Kwon (@stablekwon) September 17, 2022

Meanwhile, New York prosecutors are understood to be investigating a series of chat-group investigations from former members at Jump Trading, Jane Street and Alameda Research, Bloomberg reported on March 13. Alameda filed for bankruptcy alongside FTX in November.

The investigation is reportedly looking into whether market manipulation tactics were involved in the TerraUSD stablecoin project.

Cointelegraph reached out to Terraform Labs but did not receive an immediate response.

South Korean officials traveled to Serbia to find Do Kwon

South Korean authorities have previously requested cooperation from the Serbian government to bring Kwon back.

The hunt for the controversial founder of the now-collapsed Terra ecosystem, Do Kwon, has intensified with South Korean officials reportedly confirming they sent at least two people to Serbia to track him down.

According to a Feb. 7 Bloomberg report, the prosecutor’s office in Seoul said the reports “aren’t false” regarding members of its team trekking out to the Balkan state to find Kwon.

It appears at least two state officials went — one from the prosecutor’s office and the otherfrom South Korea’s Justice Ministry.

Do Kwon speaking at a conference about Terra before the ecosys. Source: Terra.

South Korean-based publication Chosun Media reported on Dec. 11 that a state intelligence official informed them that Kwon had based himself in Serbia.

There is currently no extradition treaty between South Korea and Serbia.

This likely made Serbia a great hideout spot for Kwon, according to a recent opinion article from Minso Kim, a writer for the South Korean publication Chosun Media.

South Korea has however stripped Kwon of his passport, which may make future travel more difficult.

Kwon has been accused of being on the run since Sept. 14, when South Korean prosecutors issued an arrest warrant against him, an accusation that he denied in October.

The 31-year-old fallen entrepreneur has also been accused of breaching capital markets laws.

While Kwon is known to be a prolific tweeter, he went nearly two months without tweeting or retweeting a single post — causing some to speculate what the controversial figure has been up to.

But Kwon recently responded to an evocative tweet targeted at him, stating that he hasn’t stolen any money and has never had any “secret cashouts.”

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

To date, Kwon denies any wrongdoing.

The collapse of the Terra ecosystem was in part triggered by the de-peg of its TerraClassicUSD (USTC) algorithmic stablecoin, UST. Terra Classic (LUNC) was closely linked to the stablecoin, with that too falling close to 100%.

Approximately $60 billion worth of value was wiped out of the ecosystem.

Cointelegraph reached out to Terraform Labs and the South Korean Prosecutor’s office for comment but did not receive an immediate response.

Terra co-founder Do Kwon hiding out in Serbia, authorities say

South Korean authorities have requested cooperation from the Serbian government in order to bring Kwon back to face charges in South Korea.

The global manhunt for Terraform Labs’ controversial founder and CEO Do Kwon continues to rage on, with South Korean authorities now believing he’s in Serbia after leaving Singapore in September.

According to a Dec. 11 report from Chosun Media, South Korean authorities followed a tip-off concerning Do Kwon’s whereabouts suggesting he is now in Serbia and has been able to confirm it.

“Recently, we obtained intelligence that CEO Kwon was in Serbia, and it was found to be true,” an official told the outlet.

The report also states that South Korea’s Ministry of Finance “is in the process of requesting cooperation from the Serbian government” as part of the investigation.

South Korean authorities have been on the hunt for Do Kwon since Terra’s collapse, but haven’t seemed to have had much luck pinpointing his location until now.

The 31-year-old was understood to have moved to Singapore toward the end of April, just before the Terra ecosystem’s shock collapse.

On Sept. 14, the Seoul Southern District Prosecutor’s Office’s Financial and Securities Criminal Unit issued an arrest warrant against Kwon for allegedly violating South Korean capital markets laws.

Around that time, authorities in Singapore confirmed that Kwon was no longer in the country, and was understood to have flown to Dubai in transit to a new unknown destination.

Shortly after that, on Sept. 26, Interpol also reportedly issued a “Red Notice” against Kwon. As of Dec. 11, however, Do Kwon doesn’t appear to have been added to Interpol’s Red Notice database on the website.

On Oct. 6, South Korea’s Ministry of Foreign Affairs issued an order for Kwon to surrender his passport. The ministry added that failure to comply would result in the cancellation of his passport altogether.

Later that month, prosecutors in South Korea c onfirmed reports that Do Kwon had flown to Dubai for a possible stopover before heading to another destination — which, as it turns out, might have been Serbia.

If Do Kwon turns out to be in Serbia, it remains to be seen what, if any, legal strings can be pulled from South Korea to try to extradite the Terraform Labs founder.

While South Korea has entered into a bilateral extradition treaty with 31 countries, Serbia is not among them. However, South Korea has also entered into a much broader multilateral extradition treaty with the Council of Europe, to which Serbia is a signatory.

Kwon has maintained that he is not “on the run” and has been “making zero effort to hide.” He’s continued to be active on social media over the last few months.

The collapse of the Terra ecosystem in May was partly triggered by the depegging of its algorithmic stablecoin Terra USD Classic, USTC (formerly UST), which in turn brought down its sister asset Luna Classic, LUNC (formerly LUNA) by nearly 100%.

Cointelegraph reached out to representatives for Terraform Labs for comment but did not receive an immediate response.

FTX’s Bankman-Fried to face market manipulation probe, Do Kwon chimes in

As part of a broader inquiry into FTX’s collapse, federal prosecutors are looking at the role that FTX and Alameda may have played in the fall of Terra.

United States federal prosecutors have reportedly begun investigating whether the collapse of the Terra ecosystem was in fact triggered by market manipulation tactics by former FTX CEO Sam Bankman-Fried.

According to a Dec. 7 report from The New York Times (NYT), the prosecutors — as part of a broader inquiry into FTX’s own collapse — are investigating whether Bankman-Fried’s empire intentionally caused a flood of “sell” orders on Terra’s algorithmic stablecoin TerraUSD Classic (USTC), formerly TerraUSd (UST).

The sudden increase in UST sell orders were said to make it difficult to match them with corresponding “buy” orders, which in turn forced more downward price pressure on UST, causing it to depeg from its intended 1:1 ratio with the U.S. dollar.

The events also led to the fall of Terra’s native token, Terra Classic (LUNC), formerly LUNA, as the two cryptocurrencies were designed to be linked.

But while no one has been able to precisely determine the root cause behind the collapse of LUNC and USTC in May, it is known that the majority of the USTC sell orders came from Bankman-Fried’s trading firm Alameda research, according to the NYT.

A person with knowledge on the matter also told NYT that Alameda Researched also placed a big bet on the price of LUNC falling.

Like with most comments Bankman-Fried has shared since FTX’s collapse, the former CEO claimed that he was “not aware of any market manipulation and certainly never intended to engage in market manipulation,” according to NYT.

“To the best of my knowledge, all transactions were for investment or for hedging,” he added.

Responding to the recent report, Terraform Labs CEO Do Kwon shared his thoughts on the matter to his 1 million Twitter followers in a Nov. 8 tweet, who suggested it was time for Genesis Trading come clean about an alleged $1 billion loan in UST to “SBF or Alameda” shortly before Kwon’s Terra ecosystem crashed.

I think the time has come for @GenesisTrading to reveal if they provided the $1B UST shortly before the crash to SBF or Alameda – the purchase from LFG was represented as stemming from “interest to participate in the Terra Defi ecosystem” – not to provide ammo for a peg attack

— Do Kwon (@stablekwon) December 8, 2022

Kwon also stated that a large currency contraction that UST underwent in Feb. 2021 was started by Alameda “when they sold 500mm UST in minutes to drain its curve pools during the MIM crisis.”

“What’s done in darkness will come to light,” Kwon added on the matter.

South Korean prosecutors accuse Do Kwon of manipulating Terra’s price

Prosecutors have reportedly secured a “messenger conversation” in which Kwon ordered an employee to manipulate Terra’s market price.

A local report from South Korea claims that the country’s prosecutors have obtained evidence to suggest Terraform Labs co-founder Do Kwon had onceordered an employee to manipulate the price of Terra Luna Classic (LUNC).

A report by Korean Broadcasting System (KBS) on Nov. 3 quotes an official from the South Korean Prosecutors Office, who said they have obtained a “conversation history” in which “CEO Kwon specifically ordered price manipulation.”

The reported evidence came in the form of a “messenger conversation” between Kwon and a former Terraform Labs employee. Prosecutors did not disclose further details, noting:

“I can’t reveal details, but it was a conversation history where CEO Kwon specifically ordered price manipulation.”

While the exact details of the price manipulation remain undisclosed, the price action of Terra’s LUNC (formerly LUNA) during the last bull market was undoubtedly one of the most impressive across all cryptocurrencies.

Its price rose over 2,800% from $4.18 in late May 2021 to its all-time high of $119.18 on Apr. 5. 2022, before its cataclysmic fall on Apr. 30, according to CoinGecko data.

The report however notes that Kwon’s representative has continued to deny these allegations.

Kwon and his representatives have also previously denied alleged violations of South Korea’s capital markets laws.

In September, Terraform Labs said the case against its co-founder has become “highly politicized” and that prosecutors expanded the definition of a security in response to public pressure.

Kwon’s whereabouts now point to Europe

Kwon’s whereabouts ultimately continue to remain a mystery, despite the Terra ecosystem co-founder previously arguing he is “not on the run.”

Previous reports have suggested Kwon first moved from South Korea to Singapore, before transitioning to Dubai, United Arab Emirates (UAE). The KBS report now suggests Kwon is residing somewhere in Europe, and as of Nov. 3, without a valid passport.

“Kwon, who has an arrest warrant, had his passport invalidated as of today,” the report stated, adding:

“Do Kwon is now an illegal immigrant, wherever he is, in any country, and he cannot travel legally between countries.”

If found, Kwon will also have to deal with a $57 million lawsuit recently filed against him, his fellow Terra co-founder Nicholas Platias and the Luna Foundation Guard (LFG) in the Singapore High Court.

The plaintiff argued that Kwon, Platias and the LFG fraudulently claimed Terra’s stablecoin, Terra USD (UST) — now TerraUSD Classic (USTC) — was “stable by design” and able to maintain its peg to the U.S. dollar.

The worldwide law enforcement effort to pinpoint the controversial CEO’s location hasn’t stopped Kwon from being active on social media, with the most recent Twitter post from Kwon shared on Nov. 3.

Strangely, these last few weeks have been one of the most creative periods of my life. https://t.co/iE6DuwceVF

— Do Kwon (@stablekwon) November 3, 2022

Cointelegraph reached out to Terraform Labs and the South Korean Prosecutor’s Office for comment but did not receive an immediate response.

South Korean prosecutors accuse Do Kwon of manipulating Terra’s price

Prosecutors have reportedly secured a “messenger conversation” in which Kwon ordered an employee to manipulate Terra’s market price.

A local report from South Korea claims that the country’s prosecutors have obtained evidence to suggest Terraform Labs co-founder Do Kwon had once ordered an employee to manipulate the price of Luna Classic (LUNC).

A report by Korean Broadcasting System (KBS) on Nov. 3 quotes an official from the South Korean prosecutor’s office, who said they have obtained a “conversation history” in which “CEO Kwon specifically ordered price manipulation.”

The reported evidence came in the form of a “messenger conversation” between Kwon and a former Terraform Labs employee. Prosecutors did not disclose further details, noting:

“I can’t reveal details, but it was a conversation history where CEO Kwon specifically ordered price manipulation.”

While the exact details of the price manipulation remain undisclosed, the price action of Terra’s LUNC, formerly Terra (LUNA), during the last bull market was undoubtedly one of the most impressive across all cryptocurrencies.

Its price rose over 2,800% from $4.18 in late May 2021 to its all-time high of $119.18 on April 5. 2022, before its cataclysmic fall on April 30, according to CoinGecko data.

The report, however, notes that Kwon’s representative has continued to deny these allegations.

Kwon and his representatives have also previously denied alleged violations of South Korea’s capital markets laws.

In September, Terraform Labs said the case against its co-founder has become “highly politicized” and that prosecutors expanded the definition of a security in response to public pressure.

Kwon’s whereabouts now point to Europe

Kwon’s whereabouts ultimately continue to remain a mystery, despite the Terra ecosystem co-founder previously arguing he is “not on the run.”

“Kwon, who has an arrest warrant, had his passport invalidated as of today,” the report stated, adding:

“Do Kwon is now an illegal immigrant, wherever he is, in any country, and he cannot travel legally between countries.”

The plaintiff argued that Kwon, Platias and the LFG fraudulently claimed Terra’s stablecoin, TerraUSD (UST) — now TerraUSD Classic (USTC) — was “stable by design” and able to maintain its peg to the United States dollar.

Strangely, these last few weeks have been one of the most creative periods of my life. https://t.co/iE6DuwceVF

— Do Kwon (@stablekwon) November 3, 2022

Cointelegraph reached out to Terraform Labs and the South Korean Prosecutor’s office for comment but did not receive an immediate response.

4,400 disgruntled investors are hunting for Terra’s Do Kwon

A retail investor group is trying to track down Terraform Labs co-founder Do Kwon following the crash of the Terra ecosystems’ cryptocurrencies.

Members of a 4,400-strong Discord group called the “UST Restitution Group” (URG) have been attempting to track down the whereabouts of Terra co-founder Do Kwon.

Members of the group, seemingly out of frustration at the lack of results from law enforcement agencies, are scouring the internet for clues and sharing them with the group in an attempt to track down Kwon.

Members have suggested that he could be residing in places such as Russia, Dubai, Azerbaijan, or even on a yacht.

Their continuing efforts come despite authorities in South Korea taking significant steps to bring Kwon to justice, with a Seoul court issuing a warrant for his arrest on Sep. 14 and Interpol having reportedly issued a “Red Notice” to law enforcement worldwide on Sept. 26 in response to the warrant.

URG was originally formed on May. 16 as a chatroom for Terra ecosystem investors and to help launch lawsuits on behalf of its members to recover funds lost from TerraClassicUSD (USTC), the so-called stablecoin that depegged from the U.S. dollar.

One member of URG, Kan Hyung-suk, will soon be traveling to Dubai according to an Oct. 19 report from the Financial Times, a city where many from the group believe Kwon is hiding. Another member from the URG was reported as saying:

“Dubai is friendly to crypto, very international (he would not stand out), and has limited extradition treaties in place. It would seem like the best fit for the 3-5 hour timezone shift apparent in the data.”

Hyung-suk is a 26-year-old software engineer and a former employee of Terraform Labs, the company behind the development of the Terra blockchain, and has been a member of the URG since May 26.

Kwon, who became a controversial figure in the wake of the Terra ecosystem implosion, has maintained claims he is not “on the run” and is fully cooperating with all government agencies in communication with him.

Kwon was interviewed on Oct. 19 by Laura Shin, a crypto-journalist and host of the Unchained podcast, who asked him a range of questions relating to current news stories.

Speaking on his current whereabouts, Kwon suggested that he moved from Singapore following the Terra crash due to privacy and personal security concerns, saying as an example that his apartment was broken into, and stated:

“It’s not in the interest of being on the run or something like that, that I don’t want to disclose where I live. It’s just that every time the location where I live becomes known, it becomes almost impossible for me to live there.”

A spokesperson from Terraform Labs maintains the charges against Kwon are “highly politicized”, and that South Korean prosecutors have expanded the definition of financial securities in response to public pressure. Kwon echoed this sentiment during his interview with Shin.

4,400 disgruntled investors are hunting for Terra’s Do Kwon

A retail investor group is trying to track down Terraform Labs co-founder Do Kwon following the crash of the Terra ecosystems’ cryptocurrencies.

Members of a 4,400-strong Discord group called the UST Restitution Group (URG) have been attempting to track down the whereabouts of Terra co-founder Do Kwon.

Members have suggested that he could be residing in places such as Russia, Dubai, Azerbaijan or even on a yacht.

Their continuing efforts come despite authorities in South Korea taking significant steps to bring Kwon to justice, with a Seoul court issuing a warrant for his arrest on Sep. 14 and Interpol reportedly issuing a Red Notice to law enforcement worldwide on Sept. 26 in response to the warrant.

URG was originally formed on May 16 as a chatroom for Terra ecosystem investors and to help launch lawsuits on behalf of its members to recover funds lost from TerraUSD Classic (USTC), the so-called stablecoin that depegged from the United States dollar.

One member of URG, Kan Hyung-suk, will soon be traveling to Dubai, according to an Oct. 19 report from the Financial Times, a city where many from the group believe Kwon is hiding. Another member from the URG was reported as saying:

“Dubai is friendly to crypto, very international (he would not stand out), and has limited extradition treaties in place. It would seem like the best fit for the 3-5 hour timezone shift apparent in the data.”

Hyung-suk is a 26-year-old software engineer and a former employee of Terraform Labs, the company behind the development of the Terra blockchain, and has been a member of the URG since May 26.

Kwon was interviewed on Oct. 19 by Laura Shin, a crypto-journalist and host of the Unchained podcast, who asked him a range of questions relating to current news stories.

“It’s not in the interest of being on the run or something like that, that I don’t want to disclose where I live. It’s just that every time the location where I live becomes known, it becomes almost impossible for me to live there.”

A spokesperson from Terraform Labs maintains the charges against Kwon are “highly politicized,” and that South Korean prosecutors have expanded the definition of financial securities in response to public pressure. Kwon echoed this sentiment during his interview with Shin.