SEC Complaint Says Do Kwon Transferred 10,000 Bitcoin From Terra to a Swiss Bank

Feds allege that the Terraform Labs founder converted the bitcoin to cash and has withdrawn more than $100 million since June of last year.

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Do Kwon in a dark room amid city lights staring at the screen.
Do Kwon has been cited by the SEC for allegedly misleading investors on multiple fronts, including allegedly lying about how stable its stablecoin was.
Screenshot: Terra/YouTube

Do Kwon, the erstwhile CEO of Terraform Labs and its infamously unstable stablecoin Terra, now has another reason to remain on the lam. The U.S. Securities and Exchange Commission alleged he and his company transferred 10,000 bitcoin worth hundreds of millions of dollars out of the Terra/Luna project before it inevitably went bust in May last year.

The collapse of the Terra/Luna stablecoin ecosystem led to an approximate $40 billion loss for investors and led to an enormous market downturn for the entire crypto industry that’s still ongoing. This was due to the Terra stablecoin, which was supposed to remain algorithmically “pegged” to the price of the U.S. dollar, becoming “de-pegged,” leading to a death spiral for both the Terra and Luna cryptocurrencies.


According to the complaint, the now 31-year-old Kwon had transferred “over 10,000 bitcoin from Terraform and Luna Foundation Guard crypto asset platform accounts to an un-hosted wallet” meaning a so-called “cold wallet” not related to any crypto exchange which can be disconnected from the internet. The SEC then allege Kwon has been transferring bitcoin from this wallet to a bank in Switzerland, converting it all into cash.

Although the complaint did not name which bank the Terraform Labs founder was using, Kwon has withdrawn more than $100 million in fiat currency from June of last year to now, according to the SEC’s complaint.


At the time just before the crypto collapse in May of last year, the price of bitcoin was hovering around $30,000, which means the 10,000 bitcoin could have been worth $300 million if Kwon tried to immediately convert it into fiat currency.

The SEC wants Kwon and Terraform Labs to be barred from dealing in crypto, and for them to pay penalties for illegally dealing in securities. SEC Chair Gary Gensler said in a press release “This case demonstrates the lengths to which some crypto firms will go to avoid complying with the securities laws, but it also demonstrates the strength and commitment of the SEC’s dedicated public servants.”


The SEC also alleged Kwon misled investors about the stability of its UST stablecoin. According to the complaint, the company also lied to investors that the Terraform blockchain was being used by a popular Korean mobile payment app called “Chai.” Instead, the SEC said Terraform Labs “replicated Chai payments on the Terraform blockchain” to make it seem like there was far more adoption for the tech than there really was.

The complaint references a presentation aired on CNBC Africa that the company posted on YouTube back in 2019, where Kwon said “we have had 430,000 shoppers over the Chai gateway, and most of them coming in the last month. And we’ve processed nearly 2 [million] transactions up to date.”


Do Kwon has been avoiding international law enforcement for months now after South Korean prosecutors issued a warrant for his arrest. He was last traced to Dubai and then Serbia, but the failed crypto founder has repeatedly maintained he is not on the run, and has further called the allegations against him “politically motivated.” Still, the man who is definitely not running from prosecution has kept uncharacteristically quiet on his once-prolific Twitter account since the start of 2023.

Throughout the SEC’s complaint, it routinely argues that Terraform Lab’s promotion and transactions of its Terra, Luna, and wrapped Luna tokens all counted as securities in some way, shape, or form, meaning the majority of the crypto buying and selling was using unregistered assets. The SEC has stepped up its attempts to control crypto markets, reportedly taking on other stablecoins like the BUSD token issued by Paxos.