Terra’s Do Kwon Moves $62M in Bitcoin Ahead of U.S. Case Hearing

• A dormant wallet tied to TerraForm Labs makes a 1,075 BTC transfer to a new wallet.
• Kwon remains in Montenegro as local courts go back & forth on extradition choices.
• Terra’s co-founder might be asked to attend a court hearing in Manhattan later this month.

TerraForm Labs ex-CEO and co-founder Do Kwon has allegedly transferred $62.8 million in Bitcoin (BTC) between two crypto wallets. Records from the blockchain intelligence firm Arkham Intelligence show that 1,075 Bitcoins were transferred from a wallet belonging to TerraForm Labs.

Do Kwon’s Extended Stay in Montenegro

This marks just the third transaction from the address since the devastating Terra (LUNA) fiasco in May 2022, when Terra’s algorithmic stablecoin Terra USD (UST) crumbled to pieces in four days.

While the receiving end of this transaction is a brand new wallet that got the deposit from TerraForm Labs as the first transaction, its purpose remains unclear. It’s also unclear if Kwon made the transfer himself, as he is still in Montenegro , awaiting the court’s decision on extradition proceedings.

Despite the Appellate Court of Montenegro recently ruling that Kwon should be repatriated to his home country of South Korea, the United States has a fair chance of getting approval for extradition. 

With the ongoing TerraForm Labs bankruptcy case and a criminal lawsuit targeting Kwon, he may need to be present live at the September 19, 2024, hearing in New York.

Is the SEC Aware of Kwon’s Gigantic BTC Transfer?

It is important to delve deeper into TerraForm Labs’ legal woes in the United States to understand the implications of the 1,075 Bitcoin transfer.

In April 2024, a jury found Kwon guilty of defrauding customers, manipulating the market, and artificially propping up the price of his stablecoin. 

Further on, the defense’s lawyer team and the U.S. Securities and Exchange Commission (SEC) agreed for TerraForm Labs to pay a fine of $4.5 billion in disgorgement and civil penalties.

While the transfer could be related to the SEC fine imposed, crypto enthusiasts on X are also weighing the chances of a compensation transfer. As the SEC and TerraForm Labs struck this deal, the defendant was required to cease operations and draw up a plan to reimburse investors.

On the Flipside

• According to data from Arkham Intelligence, the publicly trackable TerraForm Labs wallets have shown just under $100 million in digital assets.
• Given that these reserves are everything TerraForm Labs have, it would be difficult to pay off the fine imposed by the Securities and Exchange Commission.

Why This Matters

The implosion of Terra Luna in May 2022 wiped out over $60 billion in digital assets, setting off a domino effect among crypto businesses and hedge funds and resulting in a reputational hit for the industry.

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