South Korea Signals Do Kwon Retained Law Firm Before Terra Collapse That Roiled Crypto

Sangmi Cha, Bloomberg News

Do Kwon Photographer: Woohae Cho/Bloomberg , Bloomberg

(Bloomberg) -- South Korean prosecutors indicated fallen crypto entrepreneur Do Kwon sent funds to a local law firm just before tokens he created suffered a $60 billion wipeout that shook the digital-asset sector.

A report by KBS News that Kwon sent 9 billion won ($7 million) to law firm Kim & Chang — including a payment just ahead of the collapse of the TerraUSD and Luna tokens — “isn’t false,” the prosecutors’ office in Seoul said in a text message Monday.

“We are unable to provide specifics on individual cases,” Kim & Chang said in a text message, when asked about the report from KBS News. “We have conducted our legal advisory services as usual and have legitimately received the fee for the services,” the company added, without elaborating.

Kwon was arrested in Montenegro last month and has been accused of fraud by US prosecutors. He also faces charges in South Korea, including breaching capital-markets law. The timing of the payment to lawyers suggests Kwon may have anticipated legal ructions as his crypto project frayed.

Kwon, 31, co-founded the Terraform Labs Pte crypto business. He was detained in Montenegro along with the firm’s ex-Chief Financial Officer Han Chang-joon. Kwon is expected to be extradited in time to either the US or South Korea.