Money hidden away from authorities is a tale as old as time, and it seems that it still remains a prevalent issue in the digital age. The U.S. Securities and Exchange Commission (SEC) revealed back in February, Do Kwon and Terraform Labs transferred a hefty sum of 10,000 Bitcoin (roughly 300 billion won) to a Swiss bank.
It appears the bank in question was none other than Sygnum Bank AG, which made headlines in 2017 for being the world’s first regulated Digital Asset Bank, headquartered in Zurich, Switzerland.
Now the Seoul Southern District Prosecutors’ Office’s Financial Securities Crime Joint Investigation Division disclosed that they are tracking down BTC owned by LFG (Luna Foundation Protection, UST Price Defense Organization), and some of it has been converted to cash and transferred to Sygnum accounts, which amounts to about $100 million (roughly 130 billion won), according to a report by South Korean news outlet Digital Asset on April 25.
The explanation was given during a press conference held on the same day that the prosecution charged 10 individuals involved, including former TFL co-president Shin Hyun-Seong, without prior consultation.
Transferred BTC converted into cash and stored in Sygnum accounts
The Seoul Southern District Prosecutors’ Office explained:
“We have also confirmed that $100 million has been used in several places, not left in the Sygnum account as it is, and some transfers have been made to the Kim & Chang law firm account (at the attorney’s expense) and the remaining amount is about billions of won.”
Earlier, the SEC said in February 2023 that Kwon and TFL director:
“Sent 10,000 Bitcoins from TFL and LFG accounts to personal wallets or cold wallets. Since May 2022, defendants have sent the Bitcoins in this wallet to Swiss financial institutions and turned it into fiat currency, withdrawing more than $100 million by the time of filing the lawsuit,” it said.
Prosecutors have recently disclosed that they have received requests from both South Korean and U.S. investigative agencies to freeze Sygnum bank accounts.
A spokesperson from Sygnum Bank AG told Finbold:
“While we cannot comment on any requests to freeze assets, we can communicate that after the collapse of Terra in May 2022, on the basis of an official court order, Sygnum transferred more than 70% of the Bitcoin-sale FIAT proceeds into the escrow account of an international and to other reputable law firms. Additionally, after May 2022, only payment transactions for operational business purposes, including staff salaries, office rent, IT costs and cleaning staff, were executed. No Swiss or foreign regulatory authority has accused, or is currently accusing, Sygnum of any misconduct.”
All in all, the situation remains complex as the Swiss government, as well as the banks involved, will have to determine whose freeze request was made first.