Original | DL News
Translated | Wu on Blockchain
(Note: This article was published on March 1 and is not the latest development in the Do Kwon case)
Cryptocurrency fugitive Do Kwon has been on the run from Interpol for months. A Korean professor has been following the movements of the Terraform Labs CEO. “I’m really fascinated by his address and on-chain data,” said Jaewoo Cho, a blockchain expert and assistant professor at Seoul Hannam University, in an interview with DL News. It’s like “drawing a portrait. You get to know him.”
- Comparing the advantages and disadvantages of different types of Rollups: Classic, Enshrined, and Sovereign Rollups
- What is BNBChain’s intention behind launching opBNB as it already focuses on performance and aims to be L2?
- Themis Protocol can activate the Filecoin community with another phenomenal application in the FVM ecosystem
Why track the South Korean co-founder of Terraform Labs in Singapore for nearly a year? “Just for fun… Doxxing is my hobby.” Jaewoo Cho is not the only one who wants to know Kwon’s whereabouts. Terraform was at the center of a $60 billion crash when its algorithmic stablecoin, TerraUSD, collapsed in May. The crash also brought down hedge fund Three Arrows Capital, lending company Voyager, and exchange giant FTX.
Do Kwon is a fugitive. He has been indicted by South Korean and U.S. authorities for his role in what is known as a multi-billion dollar fraud case, and Interpol is also seeking his arrest. Korean officials say Kwon is hiding in Serbia. Do Kwon denies he is evading law enforcement.
Cho says he predicted that Terraform Labs would collapse when he first heard about the company in April 2019. At the time, he was investigating the company on behalf of venture capitalists. He was not only shocked by the scale of the project, but also found several structural weaknesses. Cho claims he pointed out some risks to Terraform Labs, such as black swan events, which are extremely rare but can be catastrophic if they occur. “They just let it happen. They ignored these problems.”
The algorithm in the “algorithmic stablecoin” was supposed to maintain the peg between TerraUSD and the US dollar by allowing people to profit by exchanging it for Terra’s native cryptocurrency, LUNA. The system relied on arbitrage traders to keep it running. But when trust disappeared, both tokens spiraled into a death spiral.
When TerraUSD collapsed in May 2022, a Korean journalist contacted Cho to verify some information using his blockchain expertise. The journalist wanted Cho to investigate Terraform Labs’ on-chain activity, particularly the activity around its Project Dawn funding program that ran from September 2021 to April 2022. Cho agreed, but when he opened his computer to look at the blockchain, he was stunned. “I was very surprised by the scale of the scam. It wasn’t one million — it was tens of billions of dollars,” he said.
The SEC charged Kwon and his Terraform Labs in February with orchestrating a “cryptocurrency securities fraud” scheme that involved $40 billion from April 2018 to May 2022. Cho continued to identify Terraform and Kwon’s wallet addresses and track their transactions, which Kwon himself did not ignore.
In a Twitter interaction in the same month as the Luna crash, Cho criticized Terra’s attempt to come back (i.e. Terra 2.0). “Cheers, keep spreading FUD,” Kwon replied, using the cryptocurrency acronym for “fear, uncertainty, and doubt.”
“Do Kwon is very arrogant,” Cho said. “He’s like, ‘Well, I’m doing that, catch me if you can.’ ” Terraform Labs and Kwon did not respond to requests for comment.
Once a cryptocurrency is sent to a crypto exchange, it no longer exists on-chain. “This is really the end of the road, this is an opportunity for government authorities and exchanges,” Cho said. His findings were published on Twitter by FatManTerra, an account known for sharing insider information about Terra’s September death, along with a spreadsheet of data collected by Cho. DL News has not independently verified the investigation’s results.
In February, Kwon wrote on Twitter, “I haven’t stolen any money, nor have I ever had a ‘secret withdrawal’ — welcome to discuss specific charges.”
Cho says he noticed Kwon’s transaction habits change over the past few months. Prior to that, the fugitive was still using the same old addresses, transferring money to and from different addresses and exchanges. Now Kwon may have started using other addresses to move his money, either through over-the-counter trades or through brokers. “I suspect that some friends or brokers are helping Kwon withdraw his money,” Cho said.
According to SEC filings, Do Kwon transferred over 10,000 Bitcoins from the accounts of Terraform and Luna Foundation Guard (another entity from the Terra ecosystem) to an unmanaged wallet, or so-called cold wallet, which then transferred the funds to a Swiss bank and converted them into cash. The complaint alleges that over $100 million in fiat currency has been withdrawn from the Swiss bank from June 2022 to February 2023.
Kwon is now planning a comeback. In recent months, Terraform Labs has hired more engineers to launch new projects, including a new blockchain that retains the old Terra name. Cho is not optimistic about Kwon’s return and is skeptical of the success of the Terra 2.0 project, calling it “completely absurd.”
After spending a lot of time tracking and analyzing the elusive Terraform CEO’s movements, Cho said he feels he knows Kwon. He laughed, “If I see him, I’ll give him a hug.”
Original link:
https://www.dlnews.com/articles/people-culture/do-kwon-terraform-professor-jaewoo-cho-tracking-crypto-fugitive-on-blockchain/?utm_source=twitter&utm_medium=organic_social&utm_campaign=
Latest development in Do Kwon case
On June 16th, a Montenegrin court ordered Do Kwon and Han Chang-Joon to remain in custody for six months as the judge considers extradition requests from Korean and US authorities. Do Kwon was previously arrested in Montenegro on March 24th for alleged forgery of documents as he planned to board a flight to Dubai.
Previously, the Korean news agency Yonhap reported that Do Kwon had refused US jurisdiction during his time on the run. Some believe that Do Kwon’s refusal of US jurisdiction may have been to reduce the severity of future punishment. Currently, the US adopts a system of sentencing based on the addition of individual crimes, with a maximum sentence of over 100 years, and the SEC and local prosecutors have already made a pre-judgment that virtual assets are securities; while in Korea, the maximum sentence is only about 40 years, and there is no standard and legal judgment of whether virtual currency is a security, so the situation is different from that of the US.
https://www.yna.co.kr/view/AKR20230403139000009?input=1195m
Like what you're reading? Subscribe to our top stories.
We will continue to update Gambling Chain; if you have any questions or suggestions, please contact us!
