Do Kwon of Terra Luna Faces Heat as $7M Transfer to Law Firm Surfaces Before Crypto Crash

Do Kwon’s Legal Troubles Continue as US Judge Denies Request to Block SEC

Do Kwon, the co-founder of the TerraUSD (UST) stablecoin project, has suffered another legal setback. A US judge has denied his request to block the Securities and Exchange Commission (SEC) from requesting certain records that are now in the possession of a Singaporean agency.

The data was obtained by the Singapore Monetary Authority (MAS), which is similar to the SEC, from the defendants of Luna Foundation Guard (LFG), a crypto organization formed solely to raise funds for the UST stablecoin’s $1 peg.

Kwon and Terraform Labs had argued that the SEC’s request for the records was “overbroad” and “unnecessary.” They also argued that the SEC was trying to obtain the records in order to “gain an unfair advantage” in its ongoing investigation into Terra.

However, Judge Jed Rakoff of the US District Court for the Southern District of New York denied Kwon’s request, finding that the SEC’s request was “appropriate” and “necessary.”

The ruling is a setback for Kwon, who is facing a number of legal challenges. He is currently under investigation by the SEC for possible securities fraud, and he is also facing criminal charges in South Korea for tax evasion and violating foreign exchange laws.

The recent court ruling is a reminder of the legal risks that cryptocurrency projects face. As the cryptocurrency industry continues to grow, regulators are increasingly scrutinizing these projects, and those that fail to comply with the law could face serious consequences.

In other news, South Korean prosecutors have confirmed that Do Kwon transferred $7 million to a prominent Seoul-based legal firm before Terra’s collapse. The report suggests that Kwon may have anticipated the collapse and may have hired the law firm to protect 

The TerraUSD (UST) stablecoin project was one of the most popular cryptocurrencies in the world until it collapsed in May 2022. The collapse of UST wiped out billions of dollars in value and led to a broader sell-off in the cryptocurrency market.

Do Kwon is currently in custody in the United States, and he is facing a number of legal challenges. It remains to be seen how the legal cases against Kwon will be resolved, but the recent court rulings are a reminder of the legal risks that cryptocurrency projects face.