Do Kwon denies prosecutors froze $67mn of his cryptocurrency assets

Do Kwon, the co-founder of collapsed cryptocurrency operator Terraform Labs, has denied that South Korean prosecutors froze an additional $39.6mn of his cryptocurrency assets as South Korean authorities began the process to revoke his passport.

The Seoul Southern District Prosecutors’ Office said on Thursday that Kwon’s bitcoin holdings, worth a total of $67mn and held in exchanges OKX and KuCoin, had now been frozen.

The prosecutors have launched an international manhunt for the 31-year-old crypto entrepreneur behind the $40bn implosion of the terraUSD and luna tokens.

“I don’t get the motivation behind spreading this falsehood — muscle flexing? But to what end,” Kwon wrote on Twitter on Wednesday. “I don’t know whose funds they’ve frozen, but good for them, hope they use it for good.”

His denial came after CryptoQuant, a blockchain data analytics platform, said last month that the Luna Foundation Guard — a non-profit organisation set up in Singapore to promote terraUSD’s growth — had created a digital wallet on crypto exchange Binance on September 15.

CryptoQuant added that 3,313 bitcoin worth about $67mn had been transferred from that luna wallet to KuCoin and OKX over three days.

Last month, South Korean prosecutors froze about $27.4mn of bitcoin held in the KuCoin wallet. OKX recently accepted authorities’ demands to freeze an additional $39.6mn.

But the prosecutors’ office declined to say how it determined that the assets belonged to Kwon, who denied the assets were his.

I don’t get the motivation behind spreading this falsehood – muscle flexing? But to what end?

Once again, I don’t even use Kucoin and OkEx, have no time to trade, no funds have been frozen.

I don’t know whose funds they’ve frozen, but good for them, hope they use it for good 🙏 https://t.co/gSucKfqsxj

— Do Kwon 🌕 (@stablekwon) October 5, 2022

Seoul’s foreign ministry said on Wednesday that Kwon’s passport would be revoked if he did not return it within two weeks, putting pressure on the fugitive crypto entrepreneur to return to South Korea and face charges of financial fraud and breach of the country’s capital market laws.

Interpol has issued a red notice for Kwon after he alleged refused to co-operate with a South Korean investigation into the meltdown of his algorithmic coins. Kwon has yet to be located but has denied that he is on the run. He could not be reached for comment.

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South Korean prosecutors said Kwon left for Singapore at the end of April. Police in the city-state said last month that he was no longer there.

South Korea was one of the most enthusiastic adopters of cryptocurrencies, but the collapse of Terraform Labs has led to scrutiny of the largely unregulated sector.

Crypto experts said investment in digital assets had slowed. “Venture capital has slashed its investment in the sector as the macroeconomic environment deteriorates amid high inflation and as bitcoin prices continue to fall,” said Donghwan Kim of Blitz Labs, a Seoul-based crypto advisory firm.