South Korean prosecutors claim that Do Kwon moved illegal funds from LUNA to Bitcoin

South Korean prosecutors have accused Do Kwon, the founder of Terra-Luna, of converting stolen funds from the project’s LUNA tokens to Bitcoin. According to reports, Kwon was allegedly involved in a scheme to manipulate the price of LUNA tokens during the project’s initial coin offering (ICO) in 2017.

However, Kwon’s reputation has taken a hit following recent developments. According to South Korean prosecutors, Kwon was involved in the embezzlement of funds from the Luna platform. Luna was built on the Terra network and was designed to be a decentralized stablecoin.

Prosecutors allege that Kwon and his associates siphoned off funds from the Luna platform, which they then converted into Bitcoin. The converted funds were then allegedly used to purchase luxury goods and properties in various countries.

Kwon is also accused of illegal capital outflow, as he allegedly transferred large sums of money out of South Korea without reporting it to the authorities. Prosecutors have stated that Kwon transferred around $22 million out of the country, which is a violation of South Korean law.

The allegations against Kwon have raised concerns about the legitimacy of the Terra project. The Luna stablecoin was one of the major assets built on the Terra network, and the embezzlement of funds from the platform has raised questions about the security and reliability of the project.

The Terra team has issued a statement regarding the allegations against Kwon. They have stated that Kwon has stepped down from his role as CEO and that the team is cooperating with the authorities. The statement also asserts that the Terra project will continue despite the allegations against Kwon.

This is not the first time that Kwon has faced legal issues related to the Terra project. In 2020, the US Securities and Exchange Commission (SEC) filed a complaint against Kwon and Terraform Labs, the company behind the Terra project. The complaint alleged that Kwon and Terraform Labs had conducted an unregistered securities offering, which raised $32 million.

The SEC complaint also alleged that Kwon and Terraform Labs had made false and misleading statements to investors about the Terra stablecoin. The SEC ultimately settled with Kwon and Terraform Labs, with Kwon agreeing to pay a fine and Terraform Labs agreeing to register the Terra stablecoin as a security.

The latest allegations against Kwon are likely to further damage his reputation and raise questions about the Terra project. The fact that Kwon allegedly converted stolen funds from Luna into Bitcoin is particularly concerning, as it raises the possibility of other blockchain projects being used to launder money.

The cryptocurrency industry has long been associated with illicit activities, and the allegations against Kwon only serve to reinforce this perception. However, it is important to note that the vast majority of cryptocurrency users are law-abiding citizens who use cryptocurrencies for legitimate purposes.

Cointelegraph wrote on an article recently, that “Kwon continued to evade arrest for nearly a year before getting caught on March 23 in Montenegro”.

The allegations against Kwon were brought forward as part of an ongoing investigation into the ICO, which has been ongoing for several years. The investigation is focused on allegations that Kwon and other Terra-Luna executives engaged in fraudulent activities to artificially inflate the price of LUNA tokens.

In conclusion, the allegations against Do Kwon are a reminder of the need for transparency and accountability in the cryptocurrency industry. While blockchain technology has the potential to revolutionize finance and create new opportunities, it is important that industry participants adhere to the highest standards of ethics and compliance. The allegations against Kwon should serve as a warning to other industry participants to act with integrity and to comply with all relevant laws and regulations.

Reference:

https://cointelegraph.com/news/do-kwon-converted-stolen-funds-from-luna-to-bitcoin-s-korean-prosecutors