- Terra Luna moved $7M to Korea’s law firm, Kim & Chang, before it imploded.
- Terra’s CEO is suspected of preparing legal responses before the collapse.
- Prosecutors are investigating if embezzlement charges can be applied.
A new discovery has been unearthed following investigations into the events before the blockchain projects of Terraforms Labs (TFL) imploded last year.
According to a local report, prosecutors tracking the flow of funds from TFL’s headquarters in Singapore found that about 9 billion won, nearly $7 million, had been remitted to Korea’s most prominent law firm, ‘Kim & Chang,’ right before the crash.
Prosecutors are now tracing the source of the money, suspecting that embezzlement charges could apply if it is discovered that the company cashed in coins.
Moreover, the transfer timing is being scrutinized as it is thought that the CEO, Kwon Do-Hyung, may have been aware of the potential for a collapse and prepared legal responses accordingly, which could further support the allegations of fraud against him.
The report noted that while Kim & Chang has refused to disclose the name under which the funds came, prosecutors believe the money can still be collected and preserved even if it was disguised as a legal response.
A report early this week revealed that Terra is being investigated over allegations of fraud and embezzlement of 414.5 billion Korean WON, equivalent to $350 million. CEO Dohyung and the firm’s management team are accused of deceiving investors and collecting billions through the ill-fated LUNA and UST.
It is estimated that around 200,000 people purchased Terra Luna and lost money due to the collapse, for which CEO Kwon has not compensated.
Notably, the prosecution theorized that Dohyung took a criminal profit of 91.4 billion KRW or $81 million, converted a significant portion of his assets into virtual currencies such as Bitcoin, and transferred them to overseas asset exchanges.
At the same time, Shin Hyun-Seong, a co-founder, was said to have collected $137 million, while the remaining seven Terra employees were accused of sharing $150 million.