- An entity associated with Do Kwon and Terra currently has over $140 million worth of Bitcoin in its wallet.
- While still unidentified, the entity funded Luna Foundation Guard’s official wallet on May 16, suggesting it has close ties to the organization.
- This same entity sent approximately 4204 BTC to OKX and KuCoin; these may be the funds that South Korean authorities are currently attempting to freeze.
An unidentified entity associated in some way with Do Kwon and Terra has its hands on over $140 million in Bitcoin.
The Bitcoin Paper Trail
There’s a chance Terra founder Do Kwon still has access to over $140 million in Bitcoin.
According to research published on Twitter by OXT Research member Ergo BTC, it’s possible that Do Kwon, Luna Guard Foundation (LFG), or another entity associated with Terra have you over 6,983.21 BTC (worth about $140,013,360 at the time of writing) in a wallet whose address starts with BC1QNF.
Terra’s ecosystem collapsed in early May when its algorithmic stablecoin, UST, depegged and flew into a death spiral, directly wiping out more than $43 billion in value in a matter of days. During the meltdown, Kwon, the crypto project’s charismatic figurehead, stated he’d deploy LFG’s bitcoin reserves (worth over $3 billion at the time) to stop the stablecoin from spiraling. However, critics suspect that Kwon pocketed some of the funds instead of using them to stabilize the project.
The entity behind the BC1QNF wallet originally received more than 12,812.91 BTC ($256,898,845 at today’s prices) from 15 different Binance accounts on May 11 and 12 in a different wallet, BC1QJUV. This wallet then sent 12,147.91 BTC to a secondary wallet, BC1QU8. The notable thing about this new wallet is that it interacted directly with LFG’s official addresssending it 312.99 BTC on May 16.
After financing LFG, the entity started moving its remaining 11,834.92 BTC ($237,290,146) from wallet to wallet. Frequently, a fraction of the funds (varying from 1 BTC to 961 BTC) would be sent to wallets hosted on crypto exchanges OKX and KuCoin, while the bulk of the Bitcoin would be switched to a new self-custodial wallet and then another. Most funds were moved across 17 different wallets, including their latest, BC1QNF.
The Bitcoin withdrawn to OKX and KuCoin through 13 different transactions amounts to roughly 4204.31 BTC or about $84,296,415 at today’s prices.
Crypto Briefing‘s take
To be clear, there is no solid proof that Kwon, Terraform Labs, or LFG have any control over these coins. However, the fact that the entity provided funds to LFG’s official wallet in the direct aftermath of the collapse of the entire Terra ecosystem strongly indicates that the entity in charge of these wallets is likely somehow associated with the project.
Interestingly, South Korean authorities recently called on KuCoin and OKX to freeze 3,313 BTC (worth about $66,425,650 at the time of writing) on their exchanges, claiming the coins belong to Kwon. CryptoQuant, the crypto analytics firm that helped the South Korean police in their investigation, also reportedly traced the funds back to LFG’s wallet on Binance. While the numbers issued by CryptoQuant and OXT don’t exactly match, both research hubs have found connections between LFG, Binance, OKX, and KuCoin.
OXT’s research isn’t complete either. The entity owned about 11,834.92 BTC when it began moving funds. It still has 6,983.21 BTC in its final wallet and sent roughly 4204.31 BTC to centralized exchanges: in effect, about 647.4 BTC, or $12,980,370, are still unaccounted for. Most likely, these coins were sent to other wallets somewhere along the line; it will be up to prosecutors and on-chain sleuths to chase the money trail.
Following Interpol’s red notice issuance, Kwon is currently SE busca in 195 countries. I have recently took to Twitter, however, to insist that he was not “on the run.” I have also dismissed the South Korean investigation on Twitter, stating that he doesn’t use KuCoin or OKX.
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other cryptocurrencies.