Singapore Starts an Investigation Against Terraform Labs (Report)

On Mar 6, 2023

Singapore’s law enforcement agencies have reportedly begun a probe against Terraform Labs – the infamous blockchain project co-founded by crypto fugitive Do Kwon.

The authorities also estimated that the 31-year-old developer is not hiding in the city-state.

The Latest to Point the Finger at Terraform Labs

In an emailed announcement seen by Bloomberg, Singapore’s police stated, “investigations have commenced in relation to Terraform Labs,” adding the inquiries are “ongoing.”

The collapse of the organization’s native token – LUNA – and its algorithmic stablecoin – UST – was among the darkest events in crypto last year. The stablecoin, which was supposed to have a fixed $1 valuation, lost its peg against the greenback in May 2022 and plunged way below its price target.

Realizing the turbulence, investors started selling their UST reserves en masse. This resulted in more LUNA being minted to stabilize the freefall, which significantly increased the supply of the native coin. Eventually, both assets lost virtually all their value in a matter of days, triggering multi-billion investor losses and a broad market decline that echoed for months.

Failed investors and numerous institutions accused Do Kwon – Co-Founder of Terraform Labs – of having a role in the collapse. However, he was reluctant to cooperate and supposedly left South Korea to escape the consequences of his alleged fraud.

According to several sources, he frequently changed his hiding spots in the past months, with Russia, Dubai, Singapore, and the Seychelles being some of the possible destinations. The Singaporean law enforcement agencies revealed in the email that he is currently not inside the borders of the Asian city-state.

Most recent coverages indicated that his current location could be Serbia. As CryptoPotato disclosed, a delegation of South Korean authorities led by a senior Justice Ministry official visited the Balkan country last month to look for Kwon, who is even hunted by the International Criminal Police Organization (better known as Interpol).

The SEC’s Accusation

The US Securities and Exchange Commission (SEC) recently accused Terraform Labs and Do Kwon of orchestrating a gigantic fraud by offering and selling unregistered securities through the use of digital currencies. The agency suggested the scheme triggered colossal financial losses for retail and institutional investors.

It also blamed Terraform Labs for making false claims and promises that it was partnering with a Korean mobile payment application. Instead, Kwon was misleading investors to drain their funds and later employ them for personal benefit.

South Korean officials conducted a special investigation against him last summer, alleging he gifted tokens to family members to avoid taxation rules. Those assets were supposedly used to purchase properties.

This article originally appeared here.