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A wallet likely linked to Do Kwon moves $7m while crypto king in jail

A wallet likely linked to Do Kwon moves $7m while crypto king in jail
The transactions in the Kwon-linked wallet are the first since he was arrested in Montenegro on March 23 after six months on the run.

One year on from the collapse of Do Kwon’s crypto empire, the former “crypto king” faced his first bout with justice in a Montenegro court today.

But despite Kwon being behind bars, a crypto wallet, linked to Kwon according to Seoul-based academic Professor Jaewoo Cho, has made combined transactions of more than $7 million in the last few days — the first activity since before he was detained on March 23.

Cho has been watching Do Kwon’s on-chain activity for a year.

If the wallet indeed belongs to Kwon, then it is unclear who made the transactions, as Kwon has been detained while awaiting his court date. He is accused of using forged passports in Montenegro when he tried to board a getaway private jet to Dubai. In court earlier today he denied the charges and requested to secure bail for €400,000 according to local press reports.

Both the US and South Korea have requested his extradition for fraud charges of at least $40 billion.

NOW READ: Meet the professor ‘obsessed’ with tracking crypto fugitive Do Kwon across the blockchain

“If DK had any chance to connect to the internet or give his private keys to someone else in secret, it would make sense,” Cho told DL News.

Kwon’s lawyer in Montenegro did not immediately respond to a request for comment.

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The wallet has swapped just over $6.5 million into stablecoin USDC during the past few days, using decentralised exchanges Uniswap and Curve.

And 500,000 USDC was sent to a day-old intermediary wallet on Sunday, which has in turn transferred 450,100 USDC into a wallet created in September 2021.

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The main wallet, which is currently holding more than $22 million in stablecoin USDC, was created in March 2022. It received a total of 33,214 USDC in two transfers from Binance. South Korean officials have repeatedly requested that Binance, the world’s largest centralised exchange, stop any withdrawal of Kwon’s digital assets.

Binance did not respond to questions from DL News regarding the two transactions.

The transactions were made almost one year to the day after TerraUSD depegged from the dollar and fell to $0.35, prompting Kwon to tweet the now infamous “Deploying more capital — steady lads” tweet.

The last movement before May 6, was on February 28. Kwon was arrested at Podgorica Airport alongside his travelling companion and former Terra Labs CFO Han Chang-joon on March 23.

NOW READ: Do Kwon was nabbed in a private jet on tarmac in Montenegro with false Costa Rican passport

Cho, who first spotted the wallet movements and shared with DL News, outlined why he believes the wallet must belong to Do Kwon:

The wallet, Cho said, received an initial deposit of Ether from a different Ethereum wallet. This suggests that the same individual is in control of both wallets. And the other Ethereum wallet seems to be linked to Kwon because it received TerraUSD from a blockchain bridge in 2020 — around the same time and for the same amount as a wallet on the Terra blockchain sent TerraUSD to this blockchain bridge. That wallet is widely believed to belong to Kwon, Cho said.

Tracking his funds

Kwon’s on-chain activity is being closely monitored by law enforcement, as South Korean prosecutors attempt to reclaim “criminal proceeds” accrued by the Terraform Labs co-founder and his associates — and claim to have seized about $313 million so far.

Investigations are continuing in Serbia, South Korea and the US as police try to unravel how he was able to fund his six months on the run.

For several months after the collapse, Kwon bounced from South Korea to Singapore, where the company is based, then on to Dubai and from there a suspected six month stint in Serbia before disappearing over the border the Montenegro for 10 days.

He was picked up by police when he tried to board a Dubai-bound private jet using alleged forged documents — a Costa Rican passport and Belgian identification card.

As Kwon and Han’s trail through the Balkans is unpicked, more cash is being claimed for restitution. DL News last month uncovered a $2.2 million luxury Belgrade apartment bought by Han.

NOW READ: Do Kwon associate Han bought $2.2m flat in Belgrade during manhunt

Following a police raid the day after publication, Serbian authorities confirmed they had seized the property and any proceeds from selling the apartment would be sent back to South Korea. Serbian prosecutor Branko Stamenkovic told DL News that he believes “this is the most valuable temporary seizure in that case”.

Seoul Southern District Prosecutor’s office spokesman confirmed last month that it is tracking $100 million that was at one point in Swiss bank Sygnum. Some of the sum has also been transferred to Kwon’s South Korean law firm Kim & Chang, according to authorities.

While both the US and South Korea have charged him with several counts of fraud and various financial crimes, it is unclear who will get to prosecute him after he’s been tried in Montenegro.

And how much of the reclaimed assets will end up in the pockets of the retail investors that lost funds in the collapse is also unclear.

NOW READ: Crypto fugitive Do Kwon plots comeback after $60bn Terra collapse

This is now the priority for FatManTerra, the pseudonym for the Twitter-sleuth who amassed more than 100,000 followers in tracking Kwon and his inner cabal.

“There’s a sense of hope in the air. With Do Kwon in jail, I’m optimistic that there will be fair punishment for his crimes,” he told DL News.

“I hope that all of the evidence that has come out allows for civil suits and proper restitution for victims,” he said.

According to Cho, the atmosphere in the South Korean crypto community is mixed, with some looking for Kwon to first be brought home, where a large portion of his assets have been confiscated. Others doubt that he will face enough charges in Seoul and believe he should be extradited to the US.

For Professor Cho himself, the venue is unimportant. “I want him to be charged where he can be sentenced to a stronger penalty,” he said.