Swiss authorities freeze $26 million in crypto funds tied to Terraform Labs executives

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  • Swiss prosecutors freeze $26 million in crypto funds of Terraform Labs executives following requests from U.S. authorities.
  • The frozen assets are part of an investigation into fraud and securities violations linked to Terraform Labs’ collapsed project.
  • Founder Kwon Do-hyeong and former CFO Han Chang-joon face legal troubles, with recent sentencing in Montenegro and extradition sought by South Korean authorities.

Swiss authorities have taken a significant step in the ongoing investigation into Terraform Labs and its top executives by freezing approximately $26 million in cryptocurrency funds. Following requests from U.S. federal prosecutors in New York and the Securities and Exchange Commission (SEC), the move highlights the international cooperation in pursuing allegations of fraud and securities law violations.

Allegations of wrongdoing extend to Switzerland

South Korean news outlet Digital Asset has reported that the frozen assets, including Bitcoin and other cryptocurrencies, were held at Sygnum, a Switzerland-based digital asset bank. This development comes after South Korean prosecutors identified a substantial amount of “criminal proceeds” linked to Terraform Labs deposited in a Swiss bank and requested overseas authorities to freeze those assets.

Terraform Labs, led by its chief executive officer Kwon Do-hyeong, former chief financial officer Han Chang-joon, and former head of research Nicholas Platias, has faced extensive scrutiny since the collapse of its algorithmic stablecoin and cryptocurrency project Terra-Luna in May 2022. The project’s failure wiped out over $40 billion in market capitalization, leading to fraud and financial misconduct allegations against the executives.

Legal troubles mount for Terraform Labs executives

Kwon Do-hyeong, the founder and former CEO of Terraform Labs, has consistently denied the accusations against him, maintaining that any mistakes made while managing the Terra-Luna project were not intentional acts of deception. However, his legal woes have compounded in recent months.

In March, Kwon and Han Chang-joon were arrested at the Montenegrin international airport on charges of forging travel documents. Last week, a Montenegro district court sentenced them both to four months in jail for the offense. The court considered their time spent in custody from March 23 until June 15, suggesting their actual jail time could be approximately one month.

The sentences in Montenegro have raised questions about Kwon’s future as both U.S. and South Korean authorities seek his extradition to face charges related to the collapse of Terra-Luna. The Seoul Southern District Court approved the seizure of approximately $176 million in crypto assets and luxurious items belonging to Kwon, further complicating his legal situation.

The actions taken by Swiss prosecutors and the ongoing international investigation into Terraform Labs highlight the concerted effort to hold accountable those involved in the alleged financial misconduct.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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