- Transfer 1,075 BTC from the dormant wallet connected to TerraForm Labs to the new wallet.
- Mr Kwon remains in Montenegro as local courts debate his extradition.
- Terra’s co-founder may be called to appear at a court hearing in Manhattan later this month.
Do Kwon, the former CEO and co-founder of TerraForm Labs, is accused of transferring $62.8 million worth of Bitcoin (BTC) between two cryptocurrency wallets. According to records from blockchain intelligence firm Arkham Intelligence, 1,075 BTC were transferred from a wallet owned by TerraForm Labs.
Do Kwon’s long-term stay in Montenegro
This is only the third transaction from that address since the devastating failure of Terra (LUNA) in May 2022, when Terra’s algorithmic stablecoin Terra USD (UST) collapsed in just four days.
The receiving end of this transaction is a new wallet that received the deposit in the first transaction from TerraForm Labs, but its purpose remains unclear. It is also unclear whether Kwon himself made the transfer, as he is still in Montenegro, awaiting a court decision on extradition proceedings.
Although a Montenegrin appeals court recently ruled that Kwon should be extradited to his home country of South Korea, the United States has a good chance of approving his extradition.
With the ongoing TerraForm Labs bankruptcy case and criminal proceedings against Kwon, Kwon may be required to attend the live hearing in New York on September 19, 2024.
Is the SEC Aware of Kwon’s Huge BTC Transfers?
To understand the implications of the 1,075 Bitcoin transfer, it’s important to take a closer look at the legal troubles TerraForm Labs has encountered in the United States.
In April 2024, a jury found Kwon guilty of defrauding customers, manipulating the market, and artificially inflating the price of stablecoins.
The defense team and the U.S. Securities and Exchange Commission (SEC) subsequently agreed that TerraForm Labs would pay $4.5 billion in fines and civil penalties.
While this transfer may be related to the fine imposed by the SEC, X’s cryptocurrency enthusiasts are also considering the possibility of a compensation transfer. After the SEC and TerraForm Labs made this deal happen, the defendants were forced to cease operations and come up with a plan to repay investors.
On the other side
- According to data from Arkham Intelligence, publicly trackable TerraForm Labs wallets contain approximately $100 million worth of digital assets.
- Given that these reserves are all TerraForm Labs has, it will be difficult for it to pay off the SEC fine.
Why this matters
The collapse of Terra Luna in May 2022 wiped out over $60 billion in digital assets, creating a domino effect between crypto companies and hedge funds, damaging the industry’s reputation.
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