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HomeUncategorizedSingapore opens new investigation against Do Kwon’s Terraform Labs

Singapore opens new investigation against Do Kwon’s Terraform Labs

Wahid Pessarlay

Police in Singapore have announced the launch of new investigations into the affairs of Terraform Labs nearly one year after the collapse of the Terra ecosystem.

Bloomberg reported that Singaporean authorities are probing the South Korean-based company for evidence of fraudulent activity or complicity in the de-pegging of its TerraUSD, an algorithmic stablecoin. The national police also took the opportunity to clear the air that Terraform Labs co-founder Do Kwon was not hiding out in the country.

Kwon and Terraform have been the subject of a barrage of lawsuits from South Korean prosecutors stemming from a failure to make proper disclosures to investors and other violations of the Capital Markets Act. Victims of the collapse are also launching a wave of class-action lawsuits against the company in various jurisdictions.

The U.S. Securities and Exchange Commission (SEC) joined the fray in mid-February to bring criminal charges against Do Kwon and Terraform Labs. According to the filing document, the SEC claimed that Kwon misled the public by claiming that Terra was decentralized and that TerraUSD was “controlled by the defendants, not any code.”

“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD,” SEC Chair Gary Gensler remarked. “We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors.”

Despite the mounting lawsuits, Do Kwon has repeatedly maintained his innocence, claiming that the implosion was wholly his fault, but there was no fraud committed in the process. Law enforcement agencies have been hunting Kwon since the start of the debacle, with Interpol issuing a “red notice” to member countries for his arrest.

Following the trail to the Balkans

South Korean authorities have been following Kwon’s trail and widely believed that he was holed out in Singapore. A few months later, prosecutors announced that Kwon had left Singapore for Serbia, using Dubai as a getaway.

Last month, a high-powered delegation from South Korea’s Prosecutors’ office flew into Serbia to seek the cooperation of local law enforcement in apprehending Kwon. Serbian authorities say they will intensify efforts to arrest Kwon despite the non-existence of an extradition treaty.

“It seems that Do Kwon decided to escape with the fact that Serbia is a country that is not quick to cooperate with Interpol in investigations,” one official from the Prosecutor’s office said.

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