A wallet reportedly linked to Terraform Labs and its co-founder, Do Kwon, transferred $62 million worth of Bitcoin to a different address, according to data from blockchain analytics firm Arkham Intelligence.
On September 2, more than 1,075 Bitcoin — valued at roughly $62 million at the time — was moved from one of Terraform’s wallets. It remains unclear whether Kwon, who is awaiting extradition from Montenegro, was responsible for the transfer.
Terraform Labs, the company behind the collapsed algorithmic stablecoin Terra USD (UST), collapsed in 2022. This led to legal action from authorities in the United States and South Korea against Kwon and other executives for their roles in the platform’s downfall. Kwon was arrested in Montenegro in 2023 on unrelated charges and served a four-month prison sentence.
The move comes barely a month after the SEC posted an information page for investors affected by Terraform Labs.
The SEC received numerous inquiries from investors regarding compensation following a settlement reached with Terraform Labs last month.
Under the terms of the settlement, Terraform Labs has agreed to pay $4.47 billion, which includes $3.58 billion in disgorgement and a $420 million civil penalty. The agency had sought to impose a $5.3 billion penalty, its largest fine yet on a cryptocurrency project.
The settlement also prohibits co-founder Do Kwon from serving as an officer or director of any public firm. On his part, Do Kwon is personally responsible for $110 million in disgorgement penalties and roughly $14.3 million in prejudgment interest, as per the settlement agreement.
The SEC clarified that it will not receive any payments until investors and creditors are fully compensated in the related bankruptcy case. The Chapter 11 plan confirmation hearing is scheduled to take place in the fall.
In February 2023, the SEC charged Terraform Labs and Do Kwon with misleading investors and civil fraud related to the collapse of Terra USD, which wiped out billions of dollars. Terra USD was an algorithmic stablecoin linked to Luna, a governance token, designed to maintain a stable price through market incentives and algorithms. A jury found both Terraform Labs and Kwon liable for civil fraud in April.
The U.S. Commodity Futures Trading Commission (CFTC) also issued a customer advisory warning about “follow-on frauds.” These frauds typically target victims of previous scams, convincing them to participate in fraudulent recovery schemes or move stolen money.
The SEC has particularly taken issue with Terraform’s decision to hire the law firm Dentons, arguing that such a move is designed to shield funds from potential judgments in the lawsuit related to the collapse of TerraUSD.
Many enforcement authorities and financial regulators, as well as the Interpol, were already on the hunt for Kwon for his alleged involvement in the collapse of terraUSD (UST) stablecoin and the Terra ecosystem.
