Swiss Authorities Seize $26m In Crypto Tied To Terraform Labs

Swiss authorities have reportedly seized over $26 million worth of Bitcoin and other digital assets connected to Terraform Labs and its former executives. This move comes as the latest in a series of legal repercussions following the collapse of Terraform Labs’ crypto project in May 2022.

The confiscated crypto assets, previously held at the Zurich-based Sygnum Bank, belonged to Do Kwon and Han Chang-joon, former CEO and CFO of Terraform Labs, respectively, according to the news outlet Digital Asset. Swiss authorities executed this action in response to a request from the New York Federal Prosecutor’s Office and the U.S. Securities and Exchange Commission (SEC).

Notably, the amount seized—$26 million—doubles Bloomberg’s prior reports, which suggested that Kwon stored $13 million in Sygnum Bank. This disclosure from June 8 also noted that Kwon had moved an additional $29 million of cryptocurrency outside of the Swiss account.

The seizure comes as authorities in the U.S. and South Korea continue to seek separate charges against Kwon and his associates following the spectacular failure of Terraform Labs and its various projects.

The Collapse of Terraform Labs and Kwon’s Troubles

Terraform Labs and its algorithmic stablecoin project, Terra-Luna, collapsed in May 2022, erasing $40 billion in market cap and sending ripples through the broader crypto market. South Korean authorities subsequently charged Kwon in September 2022 for violating its Capital Markets Act and issued a warrant for his arrest.

Shortly after, the International Criminal Police Organisation (Interpol) issued a red notice for Kwon, a South Korean national. The notice is essentially an international arrest warrant, instructing law enforcement agencies worldwide to locate and detain him on charges of fraud.

U.S. Federal prosecutors also indicted Kwon with multiple counts of securities fraud, wire fraud, commodities fraud, and conspiracy. Both South Korea and the U.S. are currently seeking Kwon’s extradition.

Kwon and his associate Han Chang-Joon were sentenced to four months in jail by a Montenegro district court for forging travel documents. The co-founder of Terraform Labs was arrested in March in Podgorica, the Montenegro capital, while attempting to travel to Dubai with a forged passport.

Despite being released on bail in June, the duo has remained in custody, with their detention time to be included in the four-month sentence. Notably, Kwon and his associates reportedly fled multiple countries in 2022 after Terraform Labs’ project failure.

As investigations continue and more assets are seized, the full scope of the fallout from Terraform Labs’ implosion becomes clearer. What remains to be seen is how the pursuit of justice will continue in this complex, cross-border case involving crypto-assets and high-profile individuals.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.