Singapore Begins Investigation Into Do Kwon's Terraform Labs After SEC Charged Company With Defrauding Customers

Ten months after the world witnessed the epic crash of the so-called algorithmic stablecoin TerraUSD (UST) and its sister token LUNA that wiped out billions of investors' money, Singapore police have commenced an investigation into the company behind these failed crypto assets, Terraform Labs (TFL), which was co-founded by the crypto fugitive Do Kwon.

Singapore police force confirmed that "investigations have commenced in relation to Terraform Labs" and the inquiries are "ongoing," Bloomberg reported, citing an email communication.

While there were speculations that the crash of the algorithmic stablecoin was masterfully curated by Sam Bankman-Fried, the former CEO of the now-bankrupt crypto empire FTX, the collapse of UST in May 2022 triggered a wave of bankruptcies in the cryptocurrency industry. It affected crypto lenders Celsius Network and Voyager Digital and also crypto hedge fund Three Arrows Capital (3AC).

Singapore police also reaffirmed that Kwon was not there in the city-state, as had been believed by authorities since mid-September 2022.

Kwon remains a fugitive and South Korean authorities have been actively tracking him since he left Singapore last year after he claimed he was not on the run.

Reports said Kwon frequently changed his hiding spots and his stops included Dubai, Russia, Seychelles and the latest, the Balkans, where he allegedly cashed out 9.64 Bitcoins ($120,000) from one of the BTC machines in Serbia.

Last month, the U.S. Securities and Exchange Commission (SEC) charged both Kwon and Terraform Labs with defrauding investors for its LUNA and Terra USD (UST) crypto assets. The U.S. financial regulator accused them of fraud, selling unregistered securities and unregistered security-based swaps, among other related claims.

"Terraform and Kwon also misled investors about one of the most important aspects of Terraform's offering – the stability of UST, the algorithmic 'stablecoin' purportedly pegged to the U.S. dollar," a complaint filed in the U.S. District Court of the Southern District of New York read.

"We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD," SEC chair Gary Gensler said in February.

"We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses for investors," Gensler noted, adding that "this case demonstrates the lengths to which some crypto firms will go to avoid complying with the securities laws, but it also demonstrates the strength and commitment of the SEC's dedicated public servants."

Ten months after the spectacular collapse, Kwon's whereabouts are still unknown.