S. Korean Authorities Freeze $92M Assets Of Company Allegedly Linked To Terra Collapse

A South Korean court froze $92 million worth of assets belonging to executives of Kernel Labs, a company allegedly linked to the spectacular collapse of Terra in May.

Seven months into the controversial collapse of Terra, authorities are still investigating the reason behind the crash that led to the closure of a myriad of crypto businesses.

Until now, South Korean authorities have not sent any person linked to the company to jail, and so far, the whereabouts of Do Kwon, the founder of Terraform Labs, the company behind the creation of the algorithmic stablecoin TerraUSD (UST) and crypto asset LUNA, is still unknown.

Following the seizure of around $108 million in assets of Terraform Labs co-founder Shin Hyun-Seong, the Seoul Southern District Court ruled to confiscate more assets linked to Terra, this time, those of Kernel Labs' executives, local media reported.

Authorities reportedly froze $92 million in assets; $61 million reportedly owned by Kernel Labs' current CEO, Kim Hyun-Joong, and $31 million supposedly belonging to former CEO only known by the name Choi.

The Seoul Southern District Court approved the request of the prosecution to seize the properties of seven individuals allegedly involved in selling pre-issued Terra LUNA to make massive profits, one of them being Kim Hyun-Joong.

The crypto executive allegedly had the largest gain in the illicit pre-selling activity, with prosecutors estimating that he raked in at least $61 million.

Kim, according to local reports, made major real estate purchases in South Korea in 2021, including a building in Gangnam-Gu worth $27 million and an apartment in Seongdong-gu worth $7 million.

How is Kernel Labs connected to Terraform Labs?

Founded in 2018, Kernel Labs is a blockchain consulting company focused on decentralized apps and blockchain payment networks. Its current CEO was once employed in TFL as the vice president for engineering, giving authorities an angle that the two companies are somehow related.

There are also reports claiming that workers from the South Korean headquarters of Terraform Labs also worked at Kernel Labs, but this is yet to be proven.

Meanwhile, U.S. federal prosecutors are reportedly investigating the possible involvement of FTX founder and former CEO Sam Bankman-Fried in the controversial collapse of the algorithmic stablecoin TerraUSD (UST) and Terra's native token LUNA.

According to a report from the New York Times earlier this month, Bankman-Fried's centralized cryptocurrency exchange platform FTX, reportedly flooded the market with TerraUSD sell orders in small denominations that overwhelmed the system, which eventually resulted in the collapse of the algorithmic stablecoin and its linked token LUNA.