Police Investigate Embezzlement Allegations Against 'Terra·Luna'... "No Connection to Kwon Do-hyung"

[Image source=Yonhap News]

[Asia Economy Reporter Seongpil Cho] The police investigating the embezzlement of corporate assets by Terraform Labs, which caused the crash of Korean virtual currencies Luna and TerraUSD (UST), stated that "there is no connection with Kwon Do-hyung, CEO of Terraform Labs, yet."

On the 7th, Kim Seong-jong, head of the investigation department at the Seoul Metropolitan Police Agency, said at a press conference, "After receiving intelligence, we identified the suspect and are investigating the actual amount and occurrence of embezzlement." Kim added, "So far, there is only one suspect, but it is difficult to disclose who due to investigative sensitivity." Earlier, the Cyber Crime Investigation Unit of the Seoul Metropolitan Police Agency received intelligence last month that a person presumed to be an employee of Terraform Labs was suspected of embezzling corporate funds, and subsequently requested freezing of related funds and launched an investigation.

Kim explained, "There were clues in the intelligence that could be considered embezzlement," but added, "The embezzled amount has not been specified yet, so we are identifying the suspect and determining the amount." He further elaborated, "It appears that the suspect embezzled Bitcoin, not by liquidating the company's owned virtual assets into cash." The police plan to track down the embezzlement suspect and analyze the financial transaction records of Terraform Labs and the supporting foundation, Luna Foundation Guard, to determine the scale of illegal funds.

Regarding the case where investors who suffered losses from Luna and UST investments filed complaints and accusations against Kwon Do-hyung, CEO of Terraform Labs, and the Terraform Labs corporation for violating laws related to unauthorized fundraising activities, Kim said, "The Seoul Southern District Prosecutors' Office Joint Investigation Team on Financial and Securities Crimes is conducting the investigation," adding, "The amount involved is within the scope that the prosecution can handle."

Kim also commented on the live ammunition lost last month from the 101 Security Unit guarding the presidential office in Yongsan-gu, Seoul, saying, "It has not been found yet." He added, "To prevent recurrence, we are reviewing various measures including double locking systems," and "We plan to strengthen related training, conduct inspections on negligence in management, hold those responsible accountable, and establish discipline."

Regarding the lost live ammunition, Kim said, "All internal staff consented and conducted searches," and "We are analyzing CCTV footage keeping various possibilities open." He added, "We are conducting analysis because there is a possibility that someone may have taken the ammunition."

About former Captain Lee Geun, who recently returned after joining the foreign volunteer unit 'International Legion of Territorial Defense' in Ukraine, Kim said, "We are coordinating his attendance schedule." Earlier, on the 27th of last month, the International Crime Investigation Division 2 of the Seoul Metropolitan Police Agency sent investigators to Incheon Airport to interview former Captain Lee after he disembarked from the plane to check his injury status and also proceeded with travel ban procedures.

Previously, the Ministry of Foreign Affairs filed a complaint with the police against Mr. Lee in March for violating the Passport Act after he traveled to Ukraine. This was due to the travel ban on Ukraine starting mid-February this year. Currently, entering Ukraine without the government's exceptional passport use permission is subject to criminal penalties. Violating the Passport Act by visiting or staying in Ukraine, where a Level 4 travel alert has been issued, without government approval can result in imprisonment for up to one year or a fine of up to 10 million won. Administrative sanctions such as passport invalidation may also be imposed.

This content was produced with the assistance of AI translation services.