South Korean court freezes $92M in assets related to Terra tokens

Published at: Dec. 20, 2022

More than six months after the collapse of the Terra ecosystem, South Korean authorities continue to investigate and freeze the funds of persons involved in Terra.

After seizing 140 billion won ($108 million) from Terra co-founder Shin Hyun-Seong in November, the Seoul Southern District Court has recently ruled to confiscate more assets related to Terra.

The South Korean court has ordered to freeze of 120 billion won ($92 million) in assets of former and incumbent CEOs of Terraform Labs’ affiliate firm Kernel Labs, The Korea Economic Daily reported on Dec. 20.

Founded in 2018, Kernel Labs is a blockchain consultancy firm focused on decentralized applications and blockchain payment systems. Kernel Labs is believed to have close ties with Terraform Labs, as CEO Kim Hyun-joong once reportedly served as vice president of engineering at Terraform Labs. According to some sources, Kernel Labs employees also worked at the South Korean office of Terraform Labs.

According to the new report, the Seoul Southern District Court has accepted the prosecution's request to seize property of seven people involved in selling pre-issued Terra (LUNA) tokens to make astronomical profits.

Kernel Labs CEO Kim is one of the persons involved in the case, reportedly holding the largest amount in illegal proceeds from Terra. Prosecutors estimated Kim’s illegal gains to amount to at least 79 billion won ($61 million). Prosecutors also found that another Kernel Labs executive, a former CEO, received about 41 billion won ($31 million) in illegal proceeds from Terra.

Kim reportedly made some major real estate purchases in South Korea in 2021. In November, he bought a building in Gangnam-gu, the most expensive area in Seoul, for 35 billion won ($27 million). In June, he also purchased an apartment in Seongdong-gu for about 9 billion won ($7 million).

Related: South Korean judge dismisses arrest warrants for Terra co-founder Do Kwon’s former associates

The news comes amid global authorities continuing to search for Terraform Labs' controversial founder and CEO Do Kwon. According to the latest reports, South Korean authorities believe that Kwon was hiding in Serbia as of mid-December after leaving Singapore a few months ago.

As previously reported, the collapse of Terra has emerged as one of the biggest contagions on the cryptocurrency market in 2022. Terra’s algorithmic stablecoin, TerraUSD Classic (USTC), was one of top 10 cryptocurrencies before it lost its dollar peg in May. The event triggered a domino effect on crypto markets, causing massive liquidations and uncertainty, which subsequently undermined the crypto lending industry.

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