South Korea seeks to freeze $62 million of bitcoin linked to crypto founder Do Kwon as manhunt continues

Technology

South Korean authorities are seeking the arrest of Do Kwon, co-founder and chief executive officer of Terraform Labs. His company is behind the now-collapsed terraUSD and luna cryptocurrencies. South Korean prosecutors are now seeking to freeze bitcoin linked to Kwon.
Woohae Cho | Bloomberg | Getty Images

South Korean authorities told CNBC Wednesday that they have asked two cryptocurrency exchanges to freeze more than $60 million worth of bitcoin linked to Do Kwon, the founder of the company behind two now-collapsed digital coins.

The Seoul Southern District prosecutors office said they have put in a request to crypto exchanges OKX and KuCoin to freeze some 3,313 bitcoin tied to Kwon. At Wednesday’s price, that bitcoin is worth around $62 million.

Kwon is the founder of Terraform Labs, the company behind the algorithmic stablecoin terraUSD or UST and its sister token luna.

Combined, these coins were worth around $60 billion before they collapsed in spectacular fashion in May to near-to-nothing, sending shockwaves through the crypto industry.

South Korean authorities sought Kwon’s arrest this month and claimed he is on the run. The prosecutors said that Interpol, the global policing organization, has issued a “Red Notice” for Kwon. Such notices are issued for fugitives wanted either for prosecution or to serve a sentence.

Kwon, however, insists he is not on the run and said Tuesday on Twitter that he is “making zero effort to hide.” The crypto founder claims he goes on walks and is in his living room coding.

Public spat continues

The Seoul Southern District prosecutors office declined to comment on how they identified that the bitcoin is linked to Kwon.

But research from analytics platform CryptoQuant suggests that the Luna Foundation Guard (LFG) set up a digital wallet on Sept. 15 and sent 3,310 bitcoin to KuCoin and OKX. The Luna Foundation Guard is a non-profit aimed at promoting the blockchain Terra, created by Kwon’s company Terraform Labs.

The LFG responded on Tuesday saying it had not created any new wallets, or moved bitcoin or other digital currencies around since May 2022. It also posted its wallet address on Twitter.

But CryptoQuant replied: “That’s the public one,” suggesting the Luna Foundation Guard has another wallet address not explicitly linked to the nonprofit.

Kwon also refuted the claims of bitcoin being moved.

He said on Twitter that there was no attempt to “cashout” and that he’s not used KuCoin or OKX in “at least the last year.” He added that no funds of Terraform Labs, LFG or other entites have been frozen.

KuCoin told CNBC on Wednesday that it is “willing to cooperate with any global law enforcement agencies when it comes to cases of investigations pertaining to the origin and freezing of suspected assets.”

It added that in relation to Kwon and the request by South Korean prosecutors to freeze funds linked to the crypto founder, “we would like you to first address the issue to any related authorities and clarify their stance regarding the matter.”

CNBC told KuCoin it had already spoken to authorities. A KuCoin spokesperson said the company “can’t disclose any details in order not to interfere with the case.”

OKX has not yet responded to a request for comment.

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