South Korean Court Approves Freeze of Terraform CEO's Assets Worth $176 MillionA South Korean court has granted prosecutors’ request to freeze assets and properties belonging to Terraform Labs CEO, Kwon Do-hyeong, worth KRW 233.3 billion ($176 million). The assets, including Kwon’s Seoul residence, real estate, imported automobiles, securities, deposits, and cryptocurrencies, have been frozen, and Kwon is now unable to move or sell them.
Prosecutors allege that Kwon designed the Terra-Luna project and related decentralized finance services to defraud investors, as well as servicing unregistered financial securities. Kwon has repeatedly denied the allegations and maintains that mistakes were made in the Terra-Luna crypto project but were not designed to deceive investors.
Maximum Restitution Amount of KRW 233.3 Billion
According to a spokesperson for the Seoul prosecutor’s office, the KRW 233.3 billion is the maximum amount of assets and properties that prosecutors can confiscate if Kwon is found guilty. The spokesperson declined to comment on further details of Kwon’s assets in South Korea or the progress of seeking cooperation from overseas authorities to freeze his assets outside of Korea.
Kwon is wanted in South Korea and the US for his alleged involvement in the Terra-Luna project and related decentralized finance services. Dan Sung-Han, the director of Seoul Southern District’s joint financial crimes team, told The Wall Street Journal last week that Kwon could face over 40 years in prison if convicted.
This would be the heaviest sentence given for a financial crime in South Korea’s history. Kwon was issued an arrest warrant in September 2022 but has not been interviewed by authorities. He was reportedly living in Singapore, where Terraform Labs was based, before leaving for Serbia and then being arrested in Montenegro on March 23, 2023, for allegedly attempting to fly with forged travel documents.
Montenegro Court Hearing for Kwon’s Travel Document Forgery Charges
Kwon is facing charges of travel document forgery in Montenegro, where he was arrested earlier this year. His court hearing for these charges is set to take place on May 11, 2023. It remains unclear what impact this hearing will have on Kwon’s case in South Korea and the US. Prosecutors have yet to comment on whether Kwon’s potential conviction for travel document forgery will impact their case against him. Meanwhile, Kwon’s legal team continues to maintain his innocence and has stated that they will fight to clear his name.
Kwon’s arrest in Montenegro came after South Korean authorities issued an arrest warrant for him in September 2022, following allegations that he had defrauded investors in his Terra-Luna project and related decentralized finance services. Kwon, who is also wanted in the US, has denied all allegations against him.
The Montenegro court hearing is expected to focus solely on Kwon’s alleged travel document forgery, which he was arrested for in March 2023. It is unclear how this charge could impact Kwon’s case in South Korea and the US, but it is likely that a conviction could result in additional legal consequences for him
Conclusion
The freeze of Kwon’s assets and properties is a significant development in the case against him, as it limits his ability to move or sell his assets. If convicted, Kwon could face a potentially lengthy prison sentence, which would make it the heaviest sentence given to a financial crime in South Korea’s history. However, Kwon’s legal team maintains that their client is innocent and will continue to fight his case. The outcome of Kwon’s court hearing in Montenegro remains to be seen, and it is unclear how it will impact his case in South Korea and the US.
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