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Chasing Kwon ⛓️👮
Do Kwon and the complex web of cross border prosecution. Bitcoin whale wakes up after 10 years, moves 279 BTC to 3 different wallets. NFTs are goods and not securities? AI churns out a fake CEO.
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The Terra collapse plot thickens
Just as the collapse of Terraform Labs was dramatic, so is the prosecution of Do Kwon - which spans continents and charges that are being contested on various grounds. He was arrested in Montenegro on March 23, while trying to board a flight to flee to Dubai with falsified documents.
US, South Korea both are seeking his extradition. Everyone wants Kwon.
The US 🇺🇲
Do Kwon lawyers dismiss SEC's securities fraud allegation: The US Securities and Exchange Commission's (SEC) had accused Kwon of making false statements about the company's financials and misleading investors.
Kwon's lawyers claimed that the SEC failed to prove the alleged defrauding of US investors in connection with Terra’s $40 Billion collapse of TerraUSD (UST) and Luna (LUNA).
Kwon's lawyers argued that the SEC's allegations were based on "selective and misleading" information and that Kwon had acted in good faith. The case is ongoing, and Kwon has not yet been found guilty of any wrongdoing.
US extradition complicated by forgery charges: Prosecutors in Montenegro charged Terra co-founder Do Kwon with making and using a false passport and other identification documents to fly to Dubai.
If convicted of the false document charges, the two South Korean natives Kwon and his associate Han Chang-Joon, face prison sentences of three months to five years.
South Korea 🇰🇷
South Korean prosecutors reveal that former and current Terraform Labs executives illegitimately gained ₩ 414.5 Billion South Korean won (US $314.2 Million) from the project, with a hefty ₩ 91.4 Billion won allegedly belonging to none other than Do Kwon himself.
Freeze and seize: South Korean authorities are not giving up on their pursuit of Kwon's assets. They are in the process to freeze the Terra's assets. All of it.
Also the assets belonging to Terraform co-founder Daniel Shin, including flashy cars and luxury real estate. There's a court order pending to freeze $5.3 million of Do Kwon's assets.
Prosecutors have also requested Binance to halt any withdrawal requests associated with Kwon.
In September, prosecutors asked OKX and KuCoin to freeze 39 billion won (US$29.6 million) in cryptocurrencies owned by Do Kwon.
The Stable Kwon flashback
Terra, the once-promising crypto ecosystem, was considered a symbol of Korean success in the global scene, well, of course after BTS.
And the, what seemed like a market crash turned out to be a masterful scam orchestrated by Terraform Labs, led by their former CEO, Do Kwon. With on-chain data revealing a massive $450 million dump of UST, Terra's stablecoin, just weeks before it collapsed, it was a case of "whodunit" that left everyone in shock.
Despite an arrest warrant and an Interpol red notice against him, Kwon evaded capture for almost a year before finally getting caught in Montenegro.
But, although Kwon may have amassed millions, none of the assets tied to him are recoverable by the South Korean authorities. Why? Because the former CEO reportedly converted most of the illicit funds into Bitcoin, using overseas crypto exchanges instead of investing in physical assets. Early investigation into the Terra collapse by the United States Securities and Exchange Commission revealed that Kwon siphoned nearly $100 million worth of Bitcoin from Terra post-collapse.
The Do Kwon timeline
March 2023 - Kwon is arrested in Montenegro.
September 2022 - The arrest warrant and the denial (I’m not “on the run’)
May 2022 - Terra collapses
October 2021 - Terra founder Kwon files a lawsuit against the U.S. SEC.
2019 - Kwon is named as one of Forbes' "30 Under 30."
2018 - Terraform Labs is launched by founders Kwon and Daniel Shin.
2016 - Kwon founds the telecommunication company Anyfi.
2015 - Kwon receives a bachelor's degree in computer science from Stanford University.
September 6, 1991 - Do Kwon was born in Seoul.
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TTD Whale 🐋
The whale wakes up. Starts moving.
A Bitcoin whale who left the stash untouched for over a decade has moved over 279 BTC ~ $7.8 Million to three new wallets.
In February, an old BTC address dormant for 11 years, moved $9.6 Million BTC for 120,000,000% profit.
What do we know?
Untouched Bitcoin wallets holding large amounts of BTC have been on the move of late, and at times the move is to reemerge their investment to other addresses. Bitcoin whales are the most successful crypto investors, according to research from the Bank for International Settlements. The retail investor who buys and sells in a short time frame typically loses out.
TTD NFT 🐝
Yuga Labs, the creator of Bored Ape Yacht Club (BAYC), has won a court battle against Ryder Ripps, the co-creator of copycat NFT project RR/BAYC.
The US district court in central California found that Ripps and co-founder Jeremy Cahen had infringed Yuga Lab's trademarks with their RR/BAYC NFT collection. Yuga Labs is entitled to an injunction and damages, which will be determined at trial.
Ripps created RR/BAYC as a satire and protest against Yuga Labs, alleging that BAYC's artwork conveyed racist caricatures and had nods to Nazi symbology and language.
Does that mean NFTs are goods and not securities?
TTD Scam ⚠️
California Department of Financial Protection and Innovation (DFPI) has sent cease and desist letters to five companies for crypto scams.
Who? Maxpread Technologies, Harvest Keeper, Visque Capital, Coinbot, and QuantFund
Why? DFPI has accused them of offering unqualified securities and making false promises to investors. For making exaggerated claims about generating high returns using AI for crypto trading, and layered in multi-level marketing tactics to lure in unsuspecting victims.
WTF: AI churns out a fake CEO
Maxpread Technologies is alleged to have used a fake CEO using an AI-generated avatar programmed to recite a script. In a YouTube video posted on its official account on April 8, claimed Michael Vanes as their CEO and also an address about the company’s launch. The agency claims that it’s not a real person. Company's real CEO is actually Jan Gregory, who the company had called its chief marketing officer and corporate brand manager.
What are they saying? DFPI Commissioner Clothilde Hewlett
“Scammers are taking advantage of the recent buzz around artificial intelligence to entice investors into bogus schemes.”
TTD Surfer 🏄
Fine art auction house Sotheby's to auction CryptoPunk and other NFT artwork seized from bankrupt hedge fund, Three Arrows Capital.
TeraWulf has energised its entire 50-MW stake in the Nautilus Cryptomine facility, first-ever US nuclear-powered Bitcoin mining plant.
El Salvador has launched a Bitcoin Lightning University Program to educate its citizens on the use of the cryptocurrency.
Texas has passed a bill that requires cryptocurrency exchanges to provide proof of reserves. it aims to protect consumers from fraudulent activities.
Solana blockchain has launched a dashboard to track carbon emissions. The tracker will use on-chain data to estimate emissions in real time.
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The Token Dispatch is a daily newsletter that takes you on a 4-5 minute drive through the wild west of the Crypto World. Daily in your email inbox @13:00 GMT. Almost always.