• A Korean court has frozen assets worth $176 million of Terraform Labs CEO, Kwon Do-hyeong, as he faces allegations of defrauding investors in the Terra-Luna project. Kwon is also facing charges of forging travel documents in Montenegro, with a court hearing scheduled for May 11, 2023.
  • A Korean court has approved prosecutors’ request to freeze the assets and properties belonging to Terraform Labs CEO Kwon Do-hyeong, valued at 233.3 billion won ($176 million). Kwon’s Seoul residence, real estate, imported cars, securities, deposits, and cryptocurrencies have all been frozen, and he is currently unable to transfer or sell them.

Prosecutors allege that Kwon engineered the Terra-Luna project and related decentralized financial services to deceive investors and provided services for unregistered financial securities. Kwon has consistently denied these allegations, insisting that while there were mistakes in the Terra-Luna crypto project, they were not intended to defraud investors.

The Maximum Refund Amount is 233.3 Billion Won

A spokesperson for the Seoul Prosecutors’ Office said that if Kwon is found guilty, the maximum amount of assets and property that the prosecutors could confiscate is 233.3 billion won. The spokesperson declined to comment further on the details of Kwon’s assets in Korea or progress in seeking cooperation from overseas authorities to freeze his assets outside of Korea.

Kwon is wanted in Korea and the United States for his alleged involvement in the Terra-Luna project and related decentralized financial services. Dan Sung-Han, the head of the Seoul Southern District Financial Crime Joint Team, told The Wall Street Journal last week that if found guilty, Kwon could face more than 40 years in prison.

This would be the heaviest penalty ever imposed for a financial crime in Korea’s history. Kwon was issued an arrest warrant in September 2022 but has yet to be interrogated by authorities. He reportedly lived in Singapore, where Terraform Labs is based, then went to Serbia and was arrested in Montenegro on March 23, 2023, on suspicion of trying to fly with forged travel documents.

Montenegro Court to Hold Hearing on Kwon’s Forged Travel Document Charges

Kwon faces charges of forging travel documents in Montenegro, where he was arrested earlier this year. His court hearing for these charges is scheduled for May 11, 2023. It is unclear what impact this hearing will have on Kwon’s cases in Korea and the United States. Prosecutors have yet to comment on whether a potential conviction for Kwon’s forged travel documents would affect their case against him. Meanwhile, Kwon’s legal team continues to maintain his innocence and states that they will fight to clear his name.

Before his arrest in Montenegro, Korean authorities issued an arrest warrant for Kwon in September 2022 after accusing him of defrauding investors in his Terra-Luna project and related decentralized financial services. Kwon is also wanted in the United States, where he has denied all charges against him.

The Montenegro court hearing is expected to focus solely on Kwon’s alleged forgery of travel documents, for which he was arrested in March 2023. It’s unclear what impact this charge will have on Kwon’s cases in Korea and the United States, but a conviction could likely bring additional legal consequences for him.