Do Kwon denies that prosecutors have frozen $67 million of his cryptocurrency assets

Do Kwon, the co-founder of collapsed cryptocurrency operator Terraform Labs, has denied that South Korean prosecutors froze an additional $39.6 million of his cryptocurrency assets as South Korean authorities began the process of revoking his passport.

The Seoul Southern District Prosecutor's Office said on Thursday that Kwon's Bitcoin holdings totaling $67 million, held on the OKX and KuCoin exchanges, had now been frozen.

Prosecutors have launched an international manhunt for the 31-year-old crypto entrepreneur behind the $40 billion implosion of the terraUSD and Luna tokens.

"I don't understand the motivation for spreading this falsehood - muscle flexing? But for what purpose," Kwon wrote on Twitter on Wednesday. “I don’t know whose money they froze, but good for them, I hope they use it for good.”

His denial came after CryptoQuant, a blockchain data analytics platform, said last month that the Luna Foundation Guard - a non-profit organization set up in Singapore to support the growth of terraUSD - had created a digital wallet on crypto exchange Binance on September 15.

CryptoQuant added that 3,313 Bitcoin worth about $67 million were transferred from this Luna wallet to KuCoin and OKX within three days.

Last month, South Korean prosecutors froze about $27.4 million in Bitcoin held in the KuCoin wallet. OKX recently accepted authorities’ demands to freeze an additional $39.6 million.

But prosecutors declined to say how they determined the assets belonged to Kwon, who denied the assets belonged to him.

I don't understand the motivation for spreading this untruth - flexing muscles? But why?

Again, I don't even use Kucoin and OkEx, don't have time to trade, no funds have been frozen.

I don't know whose money they froze, but good for them, I hope they use it for good 🙏 https://t.co/gSucKfqsxj

– Mach Kwon 🌕 (@stablekwon) October 5, 2022

Seoul's foreign ministry said on Wednesday that Kwon's passport would be revoked if he did not return it within two weeks, putting pressure on the fugitive crypto entrepreneur to return to South Korea to face charges of financial fraud and violating the country's capital markets laws.

Interpol has issued a Red Notice for Kwon after he reportedly refused to cooperate with a South Korean investigation into the meltdown of his algorithmic coins. Kwon has yet to be located but has denied he is on the run. He could not be reached for comment.

South Korean prosecutors said Kwon left for Singapore in late April. The city-state's police said last month that he was no longer there.

South Korea has been one of the most enthusiastic adopters of cryptocurrencies, but the collapse of Terraform Labs has brought scrutiny to the largely unregulated sector.

Crypto experts said investments in digital assets have slowed. “Venture Capital has cut its investments in the sector as the macroeconomic environment deteriorates amid high inflation and Bitcoin prices continue to fall,” said Donghwan Kim of Blitz Labs, a Seoul-based crypto advisory firm.