Do Kwon Anticipated Terra's Collapse As He Sent Millions To Lawyers Before Crash: Report

Do Kwon, the disgraced co-founder and CEO of the blockchain firm Terraform Labs, reportedly sent millions to a top South Korean law firm prior to the spectacular crash of Terra's so-called algorithmic stablecoin TerraUSD (UST) and native token LUNA, triggering speculations that the executive was aware of the company's impending collapse.

South Korean prosecutors handling the investigation of the crashed blockchain Terraform Labs recently uncovered transactions, which according to local Korean media and national broadcaster KBS, may have suggested that Kwon was aware of his company's impending collapse.

Just before the collapse of the company's crypto assets, Kwon allegedly sent 9 billion won, or approximately $7 million to a top South Korean law firm Kim & Chang.

The whole amount quoted by Korean media was supposedly moved to the law firm for a period of a few months.

This decision was flagged by prosecutors as a calculated and deliberate move, which suggested that Kwon was not only aware of the company's possible crash but was also anticipating legal problems, according to local media.

Prosecutors, who are currently digging to find out more about Kwon's activities, linked his ill intent of prepaying the law firm to the ongoing fraud case they are building against the embattled crypto CEO currently detained in Montenegro over possession of fake documents.

Prosecutors also believe that if they could prove that the funds transferred to the law firm stemmed from criminal proceedings, they could be frozen and eventually seized.

The same law firm that received the supposed $7 million prepayment, allegedly sent lawyers to Montenegro a few days earlier to meet with Kwon and Terraform Labs' chief financial officer Han Chang-joon, KBS reported, citing people familiar with the matter as the source of information.

Kwon was charged by U.S prosecutors with devising a years-long crypto fraud that cleaned at least around $40 billion (in market value) worth of investment. He faces similar charges in his home country South Korea.

Terra crashed in May last year and triggered a series of events that led to the shutdown and filing of Chapter 11 bankruptcy of some cryptocurrency businesses.

Kwon is a popular figure in the crypto space and his previous interviews revealed his knack for double speaking and smoothly evading giving the right answer. He made headlines last month when Montenegrin authorities announced his capture at Podgorica airport in Montenegro while trying to leave the country for Dubai using allegedly fake documents.

Both the U.S. and South Korea have already sought Kwon's extradition from Montenegro.

The decision of where Kwon will be extradited is now in the hands of a Montenegrin judge, according to the country's justice minister.

However, he has to first serve time in the Balkan if found guilty of traveling using fake documents.

Last week, Binance, one of the world's largest centralized crypto exchange platforms, confirmed that it had responded to a request of the prosecutors regarding Kown but it could not provide any more details because the issue is part of an ongoing investigation.

"We provided Korean [law enforcement] authorities with the requested assistance," the platform's spokesperson said.