The world of cryptocurrency has been rocked by a recent scandal involving Terraform Labs (TFL) CEO Kwon Do-hyung and the virtual asset bank, Signum. According to investigations, Kwon and TFL’s SYGNUM bank accounts have been found to hold billions of won, and the US Securities and Exchange Commission (SEC) filed a lawsuit in February accusing Kwon of transferring 10,000 BTC (approximately 300 billion won) to the Swiss bank.
Signum, which is the world’s first virtual asset bank, was established in 2017 in Zurich, Switzerland. It has now come to light that the Seoul Southern District Prosecutor’s Office’s Financial and Securities Crime Joint Investigation Unit is tracking Bitcoin owned by Luna Foundation Guard (LFG), with some already converted into cash and stored in the Signum account.
The prosecution has indicted 10 individuals, including former TFL co-chairman Shin Hyun-seong, without detention, revealing that the $100 million transferred to Signum was used in various places, with some money going to the Kim & Chang law office account for attorney’s fees. Billions of won still remain in the account.
The SEC’s complaint against Kwon and TFL, filed in February 2023, stated that the defendants sent 10,000 bitcoins from TFL and LFG accounts to personal wallets or cold wallets. By the time the lawsuit was filed, over $100 million had been withdrawn.
The scandal has raised concerns about the transparency and legality of cryptocurrency transactions. The freezing of the Signum account would depend on the Swiss government and banks’ decision on which freeze request, from South Korea or the US, should proceed first.
Investors are reminded to be careful when investing in cryptocurrency as there are no guarantees in this space. This scandal highlights the importance of conducting thorough due diligence before investing and being aware of the risks involved.
The group has stated that they plan to do their best for the repatriation of CEO Kwon to Korea for the smooth relief of the victims. The full extent of the scandal is yet to be revealed, and the repercussions could be far-reaching.
