Do Kwon Loses Fight to Conceal Singapore Records
Do Kwon, the founder of Terraform Labs has failed in his attempt to deny the United States’ Securities and Exchange Commission (SEC) from accessing company records in Singapore.
In February, the SEC filed a complaint against Terraform Labs and its founder in a US court. The move followed an investigation that the agency had carried out into the collapse of a number of digital assets established by the company. The lawsuit claims that both the company and Do Kwon had engaged in fraud, together with the sale of unregistered securities to US citizens.
Jurisdictional challenge
Lawyers for Do Kwon had claimed that in trying to access documents related to the Singapore-domiciled company, the SEC was acting far beyond its jurisdiction. According to court filings, his defense team argued that Do Kwon is a Singapore resident while Terraform Labs is a Singapore-based company that operates on a global basis and not specifically in the United States.
The filing pointed to the fact that the Terraform Labs CEO had “limited contact with the US.” “Most of the company’s business is essentially global, and it’s not specifically aimed at the United States,” it stated.
His lawyers had filed a request for the SEC to withdraw its documentation request. In a recent hearing, US District Judge Jed Rokoff turned down Terraform’s request. The documents are understood to be held by the Monetary Authority of Singapore (MAS) although the specific nature of the documentation sought remains unclear.
The SEC claims that in founding the Terra US dollar stablecoin (TUSD) and associated cryptocurrency LUNA, Terraform Labs and Do Kwon were responsible for wiping out more than $40 billion dollars in value following their collapse. The Luna Foundation Guard (LFG), which was established to provide funds to keep the TUSD stablecoin at a $1 value, is another entity that the SEC intends to access documents from with the court’s permission. Singaporean police had stated last month that they had launched an investigation into the collapse of the TUSD stablecoin.
Meanwhile, both the South Korean and US authorities are seeking the extradition of Do Kwon to face related charges. He was arrested last month in the southeastern European country of Montenegro where he was charged with having used forged documentation to enter the country. Although he had denied it on social media, in effect Do Kwon had been on the run from the reach of South Korean authorities over the course of a number of months, spending a portion of that time in Montenegro.
Asset hunt
An investigation by authorities in South Korea in recent weeks revealed that they were unable to find any assets held in the country owned by the Terraform Labs founder. The trail in chasing down any such assets has led to the United States. It is understood that Do Kwon bought real estate in the United States under his mother’s name. This is a common tactic for those who attempt to evade future confiscation of assets.
Earlier this week, South Korean prosecutors confirmed that they are investigating a transfer of funds by Do Kwon to a leading law firm based in Seoul.
