Kwon claims that the report is a "falsehood", and "I don't know whose funds they've frozen". This joins his other claims, such as that he is "not 'on the run' or anything similar" (he is), and that Interpol didn't issue a red notice for him (they have).
South Korea reportedly freezes $39.6 million in crypto belonging to Terra founder Do Kwon, Kwon says it isn't his
Kwon and the others named in the warrant are currently in Singapore. In June, Korea banned current and former Terraform Labs employees from leaving the country, and in July Korean authorities raided multiple exchanges in connection to their investigation.
The Algorand Foundation reassured people that the funds potentially lost to Hodlnaut were less than 3% of the Foundation's assets, and "we do not anticipate operational or liquidity issues due to this action". They also wrote that they would be "pursuing all legal remedies to maximize asset recovery".
- "Algorand Foundation exposure to Hodlnaut", Algorand Foundation
However, documents from the legal proceedings surrounding the now-underwater firm revealed that Hodlnaut had 317 million UST, which it liquidated at a loss when the previously dollar-pegged UST hit $0.85. In the filing, they wrote, "Due to the market's lack of liquidity, the average exit price of UST to USDC was around 42 cents on the dollar, resulting in realized losses to Hodlnaut Trading Ltd of about USD 189.7M. As a result, Hodlnaut's total debt to depositors of USD 500M became backed by realisable assets of around USD 315M as of 13 May 2022 due to the de-pegging event."
- "Hodlnaut Cuts Staff as Terra Exposure Is Revealed", Crypto Briefing
- Tweet by FatMan
In late June, the exchange laid off 30% of staff and took other measures to cut costs. They later disclosed they were short $70 million, partly from exposure to the Terra ecosystem which collapsed in May.
- "Peter Thiel-Backed Crypto Lender Vauld Files for Protection Against Creditors", The Wall Street Journal
Report reveals that crypto investment firm Uprise lost 99% of customer funds trying to short Luna during its collapse
The firm advertised its AI-enabled automatic trading strategies, which it said would reduce the risk involved with leveraged crypto trading.
A spokesperson for Uprise stated, "It is true that damage to customer assets has occurred due to unexpected great volatility in the market."
- "Uprise lost 99% of client funds while shorting LUNA during its price crash: SE Daily", The Block
- [단독] '카카오·KB 베팅' 코인투자사, 루나로 267억 날렸다, Seoul Economic Daily (in Korean)
He later clarified that he was willing to cooperate with the investigation against TFL, but was dismayed that employees who left long before the collapse were facing an exit ban, and that they weren't notified of the ban.
Terra is facing a class action lawsuit from Korean investors, and local news had previously reported that South Korean authorities had launched an investigation.
The lawsuit argues that UST is an unregistered security, and that as a result, Binance.US was violating securities laws by listing it. The lawsuit also alleges that Binance.US misled investors, leading them to believe that UST was more stable than it actually was. More than 2,000 investors have joined the lawsuit.
- "Timechain et ses dirigeants font l’objet d’une enquête", La Presse (in French)
- "Dépouillés par une compagnie québécoise de cryptomonnaie", Le Journal de Montréal (in French)