Singapore Police Launch Investigation into Crypto Fugitive Do Kwon and Terraform Labs – Where is He?

Singaporean authorities have launched a probe into Do Kwon’s Terraform Labs, the entity that developed the now-collapsed TerraUSD stablecoin.

According to a report by Bloomberg, Singaporean police sent an emailed statement announcing that “investigations have commenced in relation to Terraform Labs.” It added that the inquiries are “ongoing,” and Kwon is not currently in the city-state.

The announcement comes less than a month after the US Securities and Exchange Commission (SEC) sued Terra founder Do Kwon and his organization Terraform Labs for securities fraud.

“[The SEC] today charged Singapore-based Terraform Labs PTE Ltd and Do Hyeong Kwon with orchestrating a multi-billion dollar crypto asset securities fraud involving an algorithmic stablecoin and other crypto asset securities,” the commission said at the time. 

The SEC also claimed that Kwon and Terraform Labs transferred over 10,000 Bitcoin out of their project and have been cashing out via a Swiss bank.

Kwon is the co-founder and CEO of Singapore-based Terraform Labs, the company that developed the TerraUSD stablecoin. The so-called algorithmic stablecoin was meant to have a constant $1 value via a mix of algorithms and trader incentives involving a sister token, Luna.

However, the stablecoin lost its dollar peg in May last year after a wave of sell-offs hit the crypto market. While Terraform Labs managed to partially repair the peg by purchasing $2B UST, the continued sell-off drained those funds, hyperinflated UST’s sister token LUNA, and crashed the price of both LUNA and UST.

Where is Do Kwon?

Following the catastrophic collapse of the Terra ecosystem, South Korean officials launched an investigation into the project as investors filed a complaint against Kwon. By September last year, the state issued an arrest warrant for Do Kwon.

In December, South Korean prosecutors claimed Do Kwon was “in hiding” in Serbia, asking the European nation’s police force to hand him over to them. The prosecutors said he had moved to Serbia via Dubai in September after leaving South Korea for Singapore around the time of the crash.

Kwon is wanted on charges of violating the Capital Markets Act and committing fraud, charges that he denies and has called “politically motivated.” But thus far, he has neither confirmed nor denied the suggestion that he has taken up residence in Serbia.

Some experts had previously claimed that Serbia could be a potential hiding spot for Kwon because it has never signed an extradition treaty with South Korea. Without this, experts say South Korean prosecutors may be in a tight spot. 

Earlier this year, a group of South Korean officials traveled to Serbia in a bid to locate Do Kwon. The prosecutor’s office in Seoul confirmed the news, noting that a senior Justice Ministry official also accompanied the delegation.

The recent wave of bankruptcies in the cryptocurrency industry has been linked to the downfall of TerraUSD (UST). After the project crashed, several prominent crypto companies, including FTX and Three Arrows Capital, declared bankruptcy. However, some reports suggest that FTX might have contributed to the collapse of TerraUSD, even though it filed for bankruptcy after the UST incident.