South Korean Terraform Labs CEO, Do Kwon, has been confirmed to have sent a large sum of money to a top law firm in the country just before the collapse of the company’s stablecoin Terra and cryptocurrency Luna.
This event caused a domino effect in the industry. Over the next few months, Kwon sent a total of $3 million to Kim & Chang, which is now under investigation by Singapore law enforcement for the source of funds sent to the law firm. Prosecutors suspect that if Kwon liquidated illicit cryptocurrency assets to pay lawyers, he could face embezzlement charges.
Kim & Chang is well-known in South Korea for representing high-profile clients in a wide array of scandalous cases. The firm represented Oxy Reckit Benckiser in a prominent court case that kicked off in 2011, where a humidifier sanitizer provided by the British company killed more than 14,000 people in South Korea.
Kim & Chang have also represented Audi Volkswagen Korea in its diesel emission scandal in 2018 and handled Uber chief Travis Kalanick’s case, where he paid an $18,000 fine for launching Uber illegally in the country back in 2014.
The timing of Kwon’s payments to Kim & Chang is also significant. Sending money to legal representatives before the crash occurred suggests that Kwon was aware the event was about to happen and pre-emptively expected legal trouble. Prosecutors believe this will help their fraud case against Kwon.
According to Attorney Choi Chang-min, “The fact that they sent a large sum of money to a large law firm before the crash could be seen as a situation in which they were prepared for judicial risks such as the prosecution’s investigation.”
Kwon’s crypto assets are still at large. On Thursday, it was reported that South Korea will seize $5 million of his funds. He’s currently held in grim conditions in a Montenegrin jail, where he’ll face charges of document forgery before being extradited to either South Korea or the US.
