South Korean Prosecutors Find New Evidence against Do Kwon

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As a researcher with a background in blockchain technology and financial fraud investigation, I find the recent developments in the Terraform Labs case particularly disturbing. The allegations of collusion between Do Kwon and Shin Hyun-Sung to deceive investors through fake transactions are concerning, especially given the significant impact this had on the crypto market last year.

Newly discovered proof implicates Terraform Labs’ co-founder Do Kwon and ex-Chai Corporation head Shin Hyun-Sung in South Korea, accused of collaborating to mislead investors via fabricated financial dealings. (Note: I understand that you asked for a paraphrase, not an exact synonym replacement for ‘assistant’. I’ve suggested one way of rephrasing the given text while maintaining the original meaning.)

Based on accounts from local news outlets, Kwon and Hyun-Sung are accused of masterminding deceitful financial dealings that artificially boosted the perceived worth and interest in TerraUST and LUNA tokens.

The native cryptocurrencies of the defunct Terra blockchain, represented by both tokens, reached zero value in March 2022. Prior to its downfall, Terraform Labs collaborated with Chai, a payment platform founded by Hyun-Sung on June 12, 2019, to process transactions for Terraform users. During a trial that started on June 17, 2022, prosecutors presented evidence against Hyun-Sung, who has been accused of being an accomplice to the Terra blockchain’s collapse since its inception.

Fake Transactions to Mislead Investors

The evidence indicated that Kwon and Hyun-Sung collaborated in misleading investors through the presentation of fabricated transfer records.

The report claims that these transactions may have been intended to deceive investors regarding the true market activity and strength of the Terra platform.

At the Seoul Southern District Prosecutors’ Office on Monday, evidence was brought forward which consisted of a conversation via phone between Kwon and Hyun-Sung in May 2019. During this discussion, they exchanged messages concerning the management of Terra’s business.

In the conversation, Kwon shared with Shin that it was possible for him to generate phony transactions that appeared authentic. He further explained that as the volume of such transactions increased, they could become indistinguishable from genuine ones within the app.

Hyun-Sung consented to joining the project and proposed initiating it on a limited basis to observe its outcomes before taking significant action.

In spite of the clear proof presented, Hyun-Sung maintained his innocence and refused to admit guilt during the trial. He further blamed Kwon’s alleged unreasonable administration and external assaults for the Terra blockchain’s downfall.

Consequences for Do Kwon

As a researcher examining this situation, I’d rephrase it as: Although Hyun-Sung has publicly refuted allegations of aiding Kwon in deceiving investors, Kwon himself is still undergoing trial for his role in the 2022 crypto market downturn, which was triggered by the collapse of the blockchain project he led.

Last year, after the unfortunate collapse of the crypto protocol in March 2022, I found myself on the run. However, my attempts to evade authorities in Montenegro using a false passport were unsuccessful, and I was eventually apprehended.

After that, he had resided in Montenegro up until the court granted his transfer to South Korea. Soon, he would be returning to face accusations of fraud in his native land.

Beyond South Korea, the individual is currently dealing with legal issues in the United States. Not long ago, he was ordered to appear in court for this matter prior to returning to South Korea.

At the US trial, it was determined that he had deceived investors by providing false information about how TerraUST and other investments would be utilized.

The SEC, which is the United States Securities and Exchange Commission, filed a lawsuit against Kwon as of June 17. However, on the same date, Kwon reached an agreement with the SEC for a settlement, requiring him to pay a total of up to $4.47 billion in disgorgement and fines.

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2024-06-17 15:51