Prosecutors Freeze Early Terra Backers Assets Worth $92 Million

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South Korean prosecutors received permission to freeze $92 million in assets linked to early Terra backers as investigations into Luna and UST’s collapse ramp up. Authorities also seized $108 million in assets from Do Kwon’s co-founder Daniel Shin. 

The Seoul Southern District Court passed a motion authorizing the freeze after investigators discovered illicit proceeds tied to Luna, the governance tokens developed by fugitive Do Kwon and his blockchain company. 

Prosecutors argued that sevens persons illegally amassed assets by offering pre-issued Luna tokens for huge profits, local media reported. The filing said that Kernel Labs CEO Amugae Kim and six others profited from this scheme prior to May’s collapse. 

Kernel Labs was founded in 2018 as a blockchain payments developer and on-chain consultancy company. Investigators said that Kernel Labs and Terra shared a relationship, with some Kernel staff like Kim contributing significantly to Kwon’s blockchain company. Kim’s frozen assets were valued at around $61 million, per reports. 

Do Kwon was also named by prosecutors as one of the seven persons with illegal gains from pre-issued Luna coins. 

Terra Investigations Heat Up

Terra’s $40 billion implosion sent shockwaves throughout the digital asset industry. Luna was previously a top 10 cryptocurrency by market cap. Do Kwon’s algorithmic stablecoin UST ranked third among stablecoins before the token crashed alongside its sister crypto Luna. 

Local and international authorities responded with investigations on several fronts, including warrants for Kwon’s arrest from Interpol and South Korean law enforcement. Sources claimed that Kwon fled to Serbia and currently lives there. 

Engineers and developers who worked for Kwon were also barred from leaving South Korea at some point. Co-founder Danie Shin’s property was raided as investigators searched for clues into how Kwon’s company failed. Authorities also raided seven exchanges, confiscating transaction records in the process. 

Lawmakers also pledged to develop regulatory policies aimed at protecting investors without hampering innovation in South Korea’s digital asset economy. 

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