Do Kwon Hires South Korean Attorney Amid Ongoing Investigation
- Terra’s CEO, Do Kwon, recently granted an interview claiming insider information could have led to Terra’s crash.
- Terra collapsed in May, wiping off $40 billion of investors’ and users’ funds.
- Terraform Labs employees are banned from leaving South Korea amidst the ongoing investigation.
Terra’s CEO, Do Kwon, has reportedly hired a legal team in South Korea as he prepares his defense amid the ongoing investigations on Terraform Labs. According to a local report, Kwon recently submitted a letter of employment at the Seoul Southern District Prosecutors’ Office.
The Terra developer recently claimed that South Korean authorities have yet to reach out to or alert him of any charges. However, authorities reportedly searched and seized assets belonging to 15 firms linked with the collapsed Terra. According to reports, prosecutors informed Kwon, who was still in Singapore, and barred the departure of important individuals in the firm from the country.
Do Kwon recently broke his silence in an interview many have believed was a publicity stunt. In the interview that Coinage’s Zack Guzman conducted, Kwon claimed that inside knowledge could possibly have been behind Terra’s crash.
The South Korean native claimed Terraform Labs employees had access to key informa on which could have been used against the firm. The information in question refers to the fund transfer between trading pools that caused the imbalance that set off the crash. According to Kwon, a “mole” exposed the transaction to the public despite it being intended to be private. He said,
So if you’re asking me whether there was a mole at Terraform Labs, that’s probably ‘yes.’ Whether somebody tried to take advantage of that particular opportunity, I would say that the answer is, ‘Yes.’”
Amidst claims that Terra operated as a Ponzi scheme, Kwon noted that early investors in the project suffered the biggest loss. In addition, the 31-year-old is alleged to have suffered a personal loss in Terra’s crash. However, the exact amount of his loss is unknown.
Despite remaining confident in Terra even after its collapse, Do Kwon finally claimed responsibility for the possible vulnerabilities in the system. The crypto developer also admitted that he might have been too optimistic about Terra’s success without considering the possibility of failure. He said,
If those opportunities existed, the blame is on the person who presented those vulnerabilities in the first place … I, and I alone, am responsible for any weaknesses that could have been presented for a short seller to start to take profit.
South Korean officials launched a probe into the collapse of the Terra ecosystem in May and later set up a committee to prevent a similar situation. Terra’s decline saw investors and users lose about $40 billion, with many reportedly taking their lives.
Authorities later disclosed that Terraform Labs had engaged in market manipulation and tax evasion. Do Kwon was accused of breaking several financial laws as well as fraud. Officials have also banned Terraform Labs employees from leaving the country until investigations are complete.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
