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Terra Kingpin Do Kwon Granted Bail By Montenegro Court

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The former CEO of the Terra blockchain Do Kwon and his associate Han Chang Joon were granted bail by the Montenegro court for $436,000 each along with being put under house arrest.

As per the official notice published by local authorities on May 12, the court has accepted the offered bail of EUR 400k each for the defendants and ordered that they be released upon payment of this amount. 

“If the defendants escape or violate the supervision measure, the bail is forfeited and entered into a special section of the budget for the work of the courts,” the court warned.

As stated in the bail document, they also promised that if bail is set, they will not hide until the end of the criminal proceedings, that they will regularly respond to court summons, and that they will be available at the address provided by their defense attorney.

Following his arrest by Montenegro authorities due to using fake travel documents, the Terra founder pleaded not guilty at the Basic Court in Podgorica, according to a Bloomberg report.

The bail came after Kwon’s attorneys had submitted their request for such terms to the Montenegrin authorities.

A year ago, the collapse of TerraUSD [UST], the stablecoin created by Terraform Labs became one of the crypto industry’s worst debacle as it wiped out tens of billions of dollars for investors. 

Since then, Kwon and his staff have been slapped with lawsuits in Korea, Singapore, and the U.S. stemming from TerraUSD’s collapse. 

Meanwhile, Daniel Shin, Kwon’s long-time business partner and Terra co-founder is set to make a formal court appearance at the Seoul Southern District Court for his first trial on May 26, TronWeekly reported the other day.

Terra’s Do Kwon Assets Seized After This

Shin, a co-accused in the stablecoin project failure was recently indicted by South Korea on violations of capital-markets law among other charges.

He and nine other staff members of Terraform Labs face multiple charges, for illegal trading; two others are accused of breach of trust.

In addition to that, a Seoul Court gave the green signal to seize $176 million in assets owned by Do Kwon after local reports emerged that the disgraced founder had allegedly concealed $100 million in a Swiss bank account.

Terraform Labs Co-Founder Do Kwon Pleads Not Guilty In Montenegro Forged Documents Case

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Terraform Labs Co-Founder Do Kwon, arrested in Montenegro based on an international warrant and accused by local authorities of using fake travel documents, pleaded not guilty during his court appearance, according to a Bloomberg report.

Do Kwon, the founder of Terra, who had been evading authorities for some time, was recently apprehended by Montenegro officials. The government of Montenegro has accused him of forging local documents and is presently awaiting extradition. Despite the crypto community’s contemplation on the collapse of Terra, which occurred a year ago, Kwon refuted certain allegations against him.

Recent reports suggest that Do Kwon pleaded not guilty at the Basic Court in Podgorica, Montenegro. Kwon and Han Chang-Joon, the former CFO of Terra, was detained based on an international warrant and found to possess a South Korean passport and counterfeit Belgian and Costa Rican travel documents. Since the duo’s possession of forged Belgian and Costa Rican passports was discovered, they have been charged with the offense.

It is important to note that using forged documents is a criminal offense in the region. Individuals found guilty of this can face imprisonment of up to five years. Branko Andjelic, the Terra duo’s defense lawyer, proposed releasing them on bail of 400,000 euros, or $437,240 each. However, prosecutor Haris Sabotic rejected this suggestion, claiming they have adequate financial means but no intention of remaining in Montenegro.

Although Do Kwon and Han Chang-Joon assert the validity of their Costa Rican passports, only time will determine the authenticity of their claim. The subsequent court hearing for the lawsuit has been set for June 16.

Terra Co-Founder Do Kwon To Stand Trial In South Korea

Daniel Shin, the co-founder of Terra, has been charged with multiple offenses related to the network’s downfall. He and seven other individuals have been accused of fraud, embezzlement, and breach of duty. The Seoul Southern District Court of South Korea has scheduled the first trial on May 26 to address these allegations. It’s worth mentioning that South Korea is also preparing for the extradition of Do Kwon.

Related Reading: | Terra’s Do Kwon Challenges US Extradition: Report |

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Source: Tradingview.com

Terra’s Daniel Shin To Make His 1st Formal Court Appearance

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Terra’s indicted co-founder Daniel Shin is set to make a court appearance at the Seoul Southern District Court for his first trial on May 26, according to a local report.

Shin, a co-accused in the Terra project failure was recently indicted by South Korea on violations of capital-markets law among other charges.

He and nine other staff members of Terraform Labs face multiple charges, for illegal trading; two others are accused of breach of trust.

In the Bloomberg report on April 25, prosecutors froze assets worth roughly 246 billion won [$184 million] allegedly belonging to Shin and nine others.

The property freeze procedure including imposing foreclosure on flats and foreign vehicles owned by former executives and others, marked the first step towards retrieving the proceeds of crime, the report noted.

According to investigators, all the defendants were directly involved with the crypto project, having handled marketing, systems development, and management. 

However, Shin’s lawyer, Kim Ki-dong, denied all the accusations in a statement.

Shin has nothing to do with the Terra, Luna collapse as he left the [company] two years before the fallout. He voluntarily returned to South Korea immediately after the collapse and has been faithfully cooperating with the probe for over 10 months, hoping to contribute to fact-finding.

Meanwhile, a Seoul Court gave the green signal to seize $176 million in assets owned by Do Kwon, a key figure in the Terra Luna debacle and Shin’s former business partner.

Terra’s Main Accused Assets Seized

The move followed after a local news agency claimed that the Terra co-founder had allegedly hidden $100 million in a Swiss bank account.

While on the run, Do-hyung Kwon, reportedly disputed US jurisdiction. This comes amidst South Korean and American law enforcement agencies competing to extradite the wanted crypto billionaire who was recently apprehended in Montenegro.

It is not yet known whether the Supreme Court actually granted the request for a postponement or whether the Terra founder actually appealed.

According to some analysts, the disgraced CEO may be buying time to lessen the severity of his sentence in the future.

On May 12, 2022, stablecoin UST and the crypto asset LUNA of the Terra Ecosystem crashed in a matter of days with investors losing millions of savings. Prosecutors alleged that the defendants took away profit worth 463 billion won [nearly $346 million] before the collapse.

Terraform CEO’s Crypto Billions Discovered In Swiss Bank SEC Pursues Legal Action

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Terraform Labs (TFL) CEO Kwon Do-hyung and TFL’s Signum bank accounts are worth billions of won. In February, the SEC filed a lawsuit against Kwon and TFL, alleging an unregistered securities issue and accused the CEO of moving 10,000 BTC (about 300 billion won) to a Swiss bank, Signum.

Signum, the world’s first virtual asset bank, was founded in 2017 in Zurich, Switzerland. The Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutor’s Office (Head Dan Seong-han) acknowledged on April 25 that they are still following Bitcoin owned by Luna Foundation Guard (LFG), with some already converted into cash and stored in the Signum account.

Terraform Labs co-founder Daniel Shin was indicted on Tuesday. The prosecution discovered that the $100 million sent to Signum was used for attorney’s fees. Billions of won are still in the account.

The prosecution also stated that freezing the Signum account would be contingent on the Swiss government and banks deciding which freeze request, from South Korea or the United States, should be processed first.

Shin and seven others were accused of illicit trading, and two more were charged with breach of trust. According to Bloomberg, prosecutors stated at a news conference that everyone involved is tied to Terra.

Terra Co-Founder Daniel Shin’s Assets Frozen Amidst Alleged Financial Wrongdoings

The frozen assets are part of a “restitution” request allowed in court to compensate victims, not a “forfeiture” motion just rejected to deposit the funds in the national treasury.

The accusation comes just one day after the Seoul Southern District Court declared that Terra Classic, as Luna was renamed after its implosion, is not a security under Korea’s Capital Markets Act. Nonetheless, prosecutors have asked the Supreme Court of Korea to rule on the case.

Shin’s attorneys maintained today that he left the Terra project in 2020 and has not been involved in operations since. The prosecutors’ “premise that Shin continued with the business although warnings from financial authorities are incorrect,” according to Shin’s lawyers, according to Korea Daily

Global Legal Implications

Following the arrests of Terraform Labs co-founder Do Kwon and chief financial officer Han Chang Joon in Montenegro last month, the legal fallout from the Terra tragedy now spans multiple countries.

Both the United States and South Korea have requested Kwon’s extradition, but he and Joon must first face charges in the country where they were arrested for using false passports.

Meanwhile, Kwon has requested that the Securities and Exchange Commission (SEC) drop the accusations against him because Terra tokens are not securities.

Related Reading: | Binance: Terra Classic’s Existing Deposit Addresses Will Be Discontinued |

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Source: Tradingview.com

Binance: Terra Classic’s Existing Deposit Addresses Will Be Discontinued

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Existing deposit addresses belonging to Terra Classic [LUNC], BNB, and Steller’s XLM are set to be retired from its platform, Binance announced.

As per the official blog post, the trading platform has been upgrading its wallet infrastructure to increase user efficiency and fund security. As a result, Binance will retire specific deposit addresses and memos in groups organized by networks.

Only impacted users who receive notifications from Binance are required to obtain a new deposit address and memo (if applicable) before the expiry date. The expiry date of old deposit addresses will be stated in the notification. Old deposit addresses will expire upon obtaining a new address.

“Email notifications will be sent out in batches to impacted users. It is strongly encouraged that all impacted users obtain a new address and memo (if applicable) upon receiving the notification,” it stated.

Binance also shared a list of network addresses scheduled for migration in Q2, 2023, that is, April to June 2023.

Besides the abovementioned coins, networks like AMB, ARBITRUM, AVAXC, BSC, CELO, CHZ, CTXC, ETC, ETH, FTM, GLMR, KLAY, MATIC, MOVR, OPTIMISM, REI, RON, RSK, THETA, TOMO, VET, WAN, WTC, and XDAI were stated as utilizing the same deposit address and will expire.

Two weeks back, the world’s largest crypto exchange burned 1.6 billion LUNC tokens in the 8th batch of the LUNC burn mechanism. In total, more than 52 billion LUNC tokens were sent to dead wallets by the Terra Luna Classic community, with Binance contributing 58% of LUNC burned.

The crypto exchange is the top contributor to the LUNC burn campaign, with over 30.5 billion LUNC tokens.

Weighted Sentiments For Terra Classic Has Turned Positive

While anticipating big burn events, the community rejected plans that would have raised the burn rate. Some feared that Binance would stop using its LUNC burn mechanism or lower burn contribution in a manner similar to how it previously reduced burn contribution for its LUNC trading charge to 50%.

After enduring the heavy bearish sentiments with the collapsed Terra ecosystem, LUNC has once again made it to the limelight. The token’s staking reached the 960 billion mark again with a ratio of over 14%. 

Moreover, crowd sentiments have surprisingly swung toward the positive side after the core developer recently made a suggestion that Terra Classic might become an AI chain.

 

Terra Founder Stashed 91.4B Assets Elsewhere, Not In South Korea- Report

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Do Kwon, Terra’s disgraced co-founder has “zero” identifiable assets in his native South Korea, Seoul Southern District Prosecutors confirmed to KBS.

According to a report from national news broadcaster KBS, local officials have acknowledged that none of Kwon’s assets are under their authority, but they claim that around 91.4 billion won of the whole amount belong to him.

A domestic property affiliate of Kwon Do-Hyung, however, only identified by “0 won,” was not included in the scope of the provisional seizure.

Moreover, Shin Hyun-Seung, also known as Daniel Shin, the second founder of Terraform has had his assets temporarily taken by the authorities.

Property and imported cars are among the confiscated assets. According to the prosecutors, Shin made illegal earnings of more than 154 billion won from the failed Terra-Luna project.

Furthermore, South Korean authorities claim that nine employees, including former and current Terraform Labs leaders, illegally earned roughly 414.5 billion Korean won [$314.2 million] from the project.

There has currently been a thorough hunt for domestic properties that were purchased with the enormous riches they received from Terra.

The property freeze procedure, which entails imposing foreclosure on flats and foreign vehicles owned by former executives and others, is the first step towards retrieving the proceeds of crime, the report noted.

But what surprised the investigators was that CEO Kwon, the former CEO who amassed tens of billions in illegal profits, did not own any property in Korea.

Terra’s Do Kwon Might Have Moved His Assets Into Overseas Exchange

An official from the prosecution said, “It was found that there is almost no property owned by CEO Kwon in Korea.”

The report also makes the assumption that the founder of Terra has converted a significant portion of his assets to Bitcoin and moved them to an international exchange for digital assets.

Meanwhile, prosecutors stated they had requested Binance, the biggest exchange in the world, to prevent CEO Kwon from withdrawing any cryptocurrencies.

Recently, the Kwon’s attorneys reportedly disputed US jurisdiction, while on the run as reported by TronWeekly.

Just two weeks before, the CEO was detained in Montenegro while attempting to board a flight using fictitious documents to conceal his identity. Both the United States of America and South Korea requested his extradition once his true identity was established.

Terra’s Do Kwon Challenges US Extradition: Report

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While on the run, Do-hyung Kwon, co-founder of Terraform Labs, reportedly disputed US jurisdiction. This comes amidst South Korean and American law enforcement agencies competing to find recruits for the wanted crypto billionaire who was recently apprehended in Montenegro.

According to a report by YNA, Kwon, a key figure in the Terra Luna debacle asked the U.S. Supreme Court to extend the deadline for submitting an appeal request.

The move, as per the article, was done with the intention of disobeying the summons order issued by the US Securities and Exchange Commission [SEC] on August 18 to October 6 last year.

In the documents submitted to the Supreme Court, Kwon’s lawyer argued, “Although Terraform is a Singapore corporation and Kwon is also a resident of Singapore, the SEC [a US institution]’s personal jurisdiction was recognized by the 2nd Court of Appeal.”

Kwon is the CEO of Terraform, an open-source software development company with limited contact with the United States. Most of this company’s business is essentially global, and it is not specifically aimed at the United States.

“Looking at the digital market as well as in a general context, the judgment of this court’s personal jurisdiction is broad and important,” Kwon’s side emphasized.

Terra Founder Attempts To Buy Out More Time

Also, it asked for a delay, stating that the attorneys’ team is under a great deal of pressure to apply for permission to appeal by the deadline of September 6.

It is not yet known whether the Supreme Court actually granted the request for a postponement or whether the Terra founder actually appealed.

According to some analysts, the disgraced CEO may be buying time to lessen the severity of his sentence in the future.

While the maximum term in South Korea is just about 40 years, in the United States, it can reach over 100 years if the punishments for many offenses are put together.

On May 12, 2022, stablecoin UST and the crypto asset LUNA of the Terra Ecosystem crashed in a matter of days, widely recognized as the most turbulent event in the history of the crypto market.

Traders’ confidence was severely damaged by the surplus supply of LUNA and the quick depegging of UST. Both assets’ prices fell sharply as a result, and they were removed from major exchanges.

Terraform Labs Founder Do Kwon Faces Fraud Charges After Montenegro Arrest

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The founder of Terraform Labs, Do Kwon, has been arrested by Montenegrin police at an airport with falsified documents. This news comes after Kwon’s location had been a mystery for months, and he had been on an Interpol wanted list in connection with last year’s TerraUSD collapse. Kwon is also facing an investigation in South Korea and has already faced civil charges filed by the U.S. Securities and Exchange Commission (SEC).

Allegations of Market Manipulation & Fraud On Terraform Labs Founder 

Federal prosecutors in New York have charged Kwon with fraud, conspiracy to defraud, commodities fraud, securities fraud, wire fraud, and conspiracy to engage in market manipulation. 

The complaint alleges that Kwon made a number of “untrue and misleading statements of material fact” over several years, citing T.V. appearances and tweets from accounts tied to Terraform Labs.

According to the filing, Kwon sought the assistance of a U.S. trading and investment firm to manipulate the market price of UST, which the firm reportedly provided. This allegation was also made by the SEC in its complaint.

According to Filip Adzic, the interior minister of Montenegro, Kwon was arrested with falsified documents at an airport earlier on Thursday. The Korean National Police Agency later confirmed his identity.

Kwon’s arrest represents a significant milestone in the ongoing investigation, as he has been the subject of multiple inquiries and was even the subject of an Interpol red notice. 

The collapse of the TerraUSD (UST) stablecoin and its $40 billion ecosystem last year sent shockwaves through the crypto markets, and Kwon was implicated in the incident.

The news of Kwon’s arrest was announced on Twitter by Filip Adzic, the minister of interior of Montenegro. Adzic’s account is followed by the official account of the prime minister of Montenegro, Dritan Abazovic, who retweeted the announcement. However, the account Adzic is unverified, and official confirmation of Kwon’s identity is still awaited.

Kwon’s extradition is being demanded by South Korea, the USA, and Singapore, and the Department of Justice has confirmed its intention to seek his extradition to the U.S.

This arrest represents a significant step forward in the investigation into the collapse of terraUSD and its associated ecosystem. The impact of this development on the broader cryptocurrency market is yet to be determined, but it is expected to attract close scrutiny from investors and regulators.

Related Reading | Coinbase CEO’s Stock Sell-Off Amidst Wells Notice Raise Eyebrows 

Terra Founder Slapped With Lawsuit Over $40B Loss

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Continuing its whip on troubled crypto firms, SEC charged Terra founder Do Kwon for alleged fraud to the tune of $40 million to its investors.

In a complaint filed in the Southern District of New York, the agency’s chair Gary Gensler alleged that the Singapore-based Terraform Labs and its boss Do-hyung 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.”

“We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors,” it added.

Often regarded as crypto’s most volatile event, on May 12, 2022, stablecoin UST and crypto asset LUNA of the Terra Ecosystem collapsed in a matter of days, wiping out the savings of countless people.

The excess supply of LUNA and the rapid depegging of UST made investors lose confidence. As a result, the prices of both assets spiral and got delisted from leading exchanges.

According to SEC’s allegations, Kwon and his firm Terraform hatched a plan to lure investors and raised billions of dollars from Apr. 2018 to May 2022.

An “interconnected suite” of crypto asset securities, such as securities-based swaps that mimicked U.S. stocks and most notably, the so-called “algorithmic stablecoin” TerraUSD, are offered and sold as a means of raising money from investors.

The firm showcased stablecoin UST as a “yield-bearing” coin, that promised to pay interest of up to 20 percent, SEC stated in its complaint.

Terra Founder Remained Defiant

In the lawsuit submitted to the federal court for the Southern District of New York in Manhattan, Kwon and Terraform was accused of breaking the Securities and Exchange Act’s registration and anti-fraud provisions.

SEC enforcement director Gurbir Grewal said in the press statement.

Today’s action not only holds the defendants accountable for their roles in Terra’s collapse, which devastated both retail and institutional investors and sent shock waves through the crypto markets but once again highlights that we look to the economic realities of an offering, not the labels put on it.

Kwon faced tremendous legal and social pressure for his role in the Terra crash. Citizens from various jurisdictions — including South Korea, Singapore, and the United States are taking legal action against him, including an Interpol arrest warrant.

Since then, the beleaguered founder has remained evasive about his whereabouts. With regard to the latest lawsuit, Kwon has not made any comments, at the time of writing this article.

Here’s Why Binance Will Suspend Terra Classic Transactions

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The largest cryptocurrency exchange in the world, Binance, had been in the news after briefly stopping withdrawals of the stablecoin USD Coin (USDC) in December 2022. Customers were withdrawing money from the exchange at a significant rate as worries about the exchange developed. The mounting worries reflected a loss of confidence in centralized exchanges as a result of numerous industry scandals in 2022.

However, Binance makes headlines yet again on similar lines, but on a lighter note. Top cryptocurrency exchange Binance has informed that on January 14 at 3:50 a.m. UTC, it would temporarily halt deposits and withdrawals for LUNC, USTC, and ANC via the Terra Classic (LUNC) network. This is as a result of the Terra Classic (LUNC) network upgrade caused by the most recent community suggestion.

It is planned for the Terra Classic (LUNC) network update to start at epoch 15,029, or about Jan. 14, 4:50 a.m. UTC, and last for roughly three hours. While temporary suspensions of deposits and withdrawals will apply, trading in LUNC, USTC, and ANC will not be impacted by the network update. The Terra Classic (LUNC) network’s withdrawal fees for LUNC, USTC, and ANC will be reviewed and, if necessary, adjusted by Binance, according to the company’s website. Once the improved network is judged reliable, deposits and withdrawals for the Terra Classic (LUNC) network will once again be accepted, however, users may not receive any more notice of this.

Binance Reduces LUNC Burns

By effectively banning LUNC reminting from burns, the proposal at the core of the Terra Classic network update attempts to deprecate the seigniorage reward policy. It also seeks to raise gas prices by five times (5x) to capitalization the community pool and increase validator or staking incentives. The proposal claims that over the past four weeks, LUNC’s on-chain burn rate has drastically lowered and will continue to do so as Binance cuts back on burns.

Binance Terra Classic LUNC

According to reports, Binance declared that it will begin to burn 50% of the LUNC spot and margin trading fees instead of 100% in response to recent developments where the LUNC burn is being reminted as a development fund. The LUNC community suggests a five-fold increase in gas taxes in light of the decrease in burn rate. “In terms of market value, Terra Classic’s gas prices are 18.42 times less expensive than Terra 2.0’s. Terra Classic gas prices will still be 3.68 times less expensive than Terra 2.0 even with a 5x increase “which supports the argument for raising the gas tax.