Do Kwon Dogged by Fraud Allegations in South Korea

Korean prosecutors have requested a “notification upon arrival” for Do Kwon, who is believed to be in Singapore


Blockworks Exclusive Art by Axel Rangel


key takeaways

  • Terraform’s co-founder and former vice president have been issued travel ban notices
  • Co-founder Shin Hyun-seung’s residence was raided by prosecutors last week

Do Kwon, the now-infamous founder of the TerraUSD and Luna cryptocurrencies, along with his associates, are faced with escalating scrutiny from Korean prosecutors over their travel in and out of the country.

A crime investigation team looking into fraud allegations against Terraform Labs has requested the Ministry of Justice to mandate a “notification upon arrival” for Do Kwon’s entry into the country, local outlet Dong-A Ilbo reported Wednesday. Such a measure is taken to alert the investigative team to the entry of an individual.

Do Kwon is believed to be living in Singapore, but prosecutors haven’t publicly revealed details of their findings into his whereabouts. 

The Seoul Southern District Prosecutor’s Joint Financial and Securities Crime Investigation Team also issued a travel ban notice against Terraform’s co-founder Shin Hyun-seong and former Vice President Kim Mo, the report said. Shin’s residence was reportedly raided by prosecutors last week.

The move follows an extensive investigation into Terraform Labs, whose algorithmic stablecoin TerraUSD’s (UST) collapse wiped off $40 billion of investors’ wealth. The investigation began in May after UST dramatically lost its peg to the US dollar. UST and Luna’s prices plunged by 91% and 99.7% respectively between May 7 and May 12, and never recouped losses.

“There were no bugs in Terra Luna,” Kyle Downey, CEO of Cloudwall, said in a webinar on Tuesday.

“This was an economic or an incentive design issue, rather than necessarily a technical issue.”

Last month, key Terraform developers were blocked from leaving the country in order to allow for an orderly investigation. More recently, seven other crypto exchanges in Korea were under investigation for alleged links to Terraform. Transaction records and other documents were seized from the offices of Upbit, Bithumb and Coinone on July 20.

Terraform, Do Kwon and a string of other firms including Three Arrows Capital are facing a class-action lawsuit in the US that accuses them of leading retail investors to purchase Terra tokens at “inflated” prices.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


Commissioner Peirce would have done things differently if she could when it comes to her agency’s crypto enforcement actions


MicroStrategy discloses the purchase of 16,000 bitcoin throughout November


Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion


Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks


DYDX supply will climb by up to 80% after the Friday unlock, but a couple factors make a massive sell-off appear unlikely


Switzerland-based Pando Asset, which has crypto products trading on the SIX Swiss Exchange, now looks to the US