Skip to content

Do Kwon’s Terraform Labs accused of laundering $4.8 million via a Korean shell company

After the widely publicized collapse of the Terra (LUNA) ecosystem which caused significant losses for investors, and accusations of fraud against its founder Do Kwon, Terraform Labs is in the spotlight again, this time for alleged money laundering.

Reportedly, the company has laundered $4.8 million through a South Korean shell company in an elaborate scheme involving a “blockchain consulting firm K” based in Seoul, according to a report by South Korean publication KBS News on May 30.

A former developer at Terraform Labs told the magazine that their past employer had ties with the “Company K”, which was run “under a borrowed name by Terra”. As per the office staff, the workspace was also titled “Terra” in the building’s floor plan but has been removed in the meantime.

The KBS News also said that the National Tax Service has discovered that Terra had transferred 6 billion won (around $4.8 million) to Company K, and reported it as “other expenses”.

The Terra plot thickens

However, Terra Research Forum’s member and outspoken Twitter user known as FatMan or @FatManTerra conducted some research, confirming there were links between the two indeed. 

Specifically, this whistleblower demonstrated the connection between Company K and Kernel Labs – which was allegedly established by the same people who created Terraform Labs.

In a series of tweets on May 30, FatMan goes into detail about this alleged plot.

As per Korean tax officials, they reportedly fined Terraform Labs for tax evasion after noticing suspicious transfers to Kernel Labs.

Other alleged transgressions

This isn’t the first time that FatManTerra, a familiar source of leaks in the crypto industry, conducts in-depth investigations into the ecosystem. 

In late May, FatMan accused Do Kwon, the CEO of TFL, of a fraud committed through the Mirror Protocol (MIR), with the intention to benefit Do Kwon and VCs, “while manipulating governance and screwing over retail.”

Meanwhile, the collapse of Terra has resulted in South Korea taking a harsher stance on crypto and forming the “Digital Assets Committee” that will focus on strict crypto regulation, as Finbold reported earlier.

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in 70+ cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10.

  • Copy top-performing traders in real time, automatically.

  • Regulated by financial authorities including FCA and FINRA.

2.8 Million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Read Next:

Weekly Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts