Singapore Probes TerraUSD's Do Kwon for Securities Fraud

Singaporean authorities have opened an investigation into Do Kwon's Terraform Labs, the company behind the failed TerraUSD stablecoin. The announcement came after the US Securities and Exchange Commission (SEC) filed a lawsuit against Kwon and his organization for securities fraud. The SEC claimed that Kwon and Terraform Labs had transferred over 10,000 Bitcoin out of their project and were cashing out through a Swiss bank.

Terraform Labs is a Singapore-based company that developed TerraUSD, an algorithmic stablecoin intended to maintain a constant value of $1 through a combination of algorithms and trader incentives involving a sister token, Luna. However, in May 2022, the stablecoin lost its peg to the US dollar after a wave of sell-offs hit the cryptocurrency market. Terraform Labs managed to partially repair the peg by purchasing $2 billion in UST, but the continued sell-off drained those funds, hyperinflated LUNA, and crashed the price of both LUNA and UST.

The investigation by Singaporean authorities is ongoing, and Kwon is not currently in the city-state. The SEC lawsuit, which was filed in February 2023, is also ongoing. The commission accused Kwon and Terraform Labs of orchestrating a multi-billion dollar crypto asset securities fraud involving TerraUSD and other crypto asset securities.

The collapse of TerraUSD and the subsequent investigations highlight the risks involved in the cryptocurrency market. Stablecoins, in particular, are intended to provide stability in an otherwise volatile market. However, the failure of TerraUSD to maintain its peg to the US dollar demonstrates the challenges faced by stablecoin developers. Additionally, the investigations by Singaporean authorities and the SEC underscore the need for greater regulation and oversight in the cryptocurrency market.

South Korean Officials Hunt for Alleged Terra Ecosystem Mastermind

An investigation was launched by South Korean officials following the disastrous collapse of the Terra ecosystem. Investors also filed a complaint against Do Kwon, resulting in a state-issued arrest warrant in September of last year. Kwon is facing charges of violating the Capital Markets Act and fraud, allegations he denies and considers politically motivated.

South Korean prosecutors reported in December that Kwon was in hiding in Serbia, requesting that the countrys police force extradite him back to South Korea. According to the prosecutors, Kwon had left South Korea for Singapore around the time of the Terra crash before moving to Dubai and then on to Serbia. However, Kwon has neither confirmed nor denied the suggestion that he is living in Serbia.

Serbias lack of an extradition treaty with South Korea could put prosecutors in a difficult position in their attempts to bring Kwon back to South Korea. Reports suggest that Serbia could be a potential hiding spot for Kwon, as he would be able to evade extradition without an agreement in place.

Earlier this year, a group of South Korean officials traveled to Serbia in an effort to locate Kwon. The prosecutors office in Seoul confirmed the news, stating that a senior Justice Ministry official was part of the delegation.

The collapse of the Terra ecosystem has been linked to the recent wave of bankruptcies in the cryptocurrency industry. Following the projects crash, several prominent crypto companies, including FTX and Three Arrows Capital, filed for bankruptcy. Although FTX filed for bankruptcy after the TerraUSD incident, some reports suggest that the company may have played a role in the UST collapse.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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