South Korean prosecutors have long believed fallen crypto-star Do Hyeong Kwon converted thousands of bitcoins into millions of dollars at an unnamed Swiss bank. That bank appears to be Sygnum, although research by finews.asia reveals the digital banking pioneer may just have been following court orders.
Everything seems to be falling into place as the missing pieces of the puzzle start to come together. Since February, speculation has raged that South Korean crypto-entrepreneur Do Hyeong Kwon transferred over 10,000 bitcoins from his business empire, including Terra Labs, which he founded.
As part of that, he reportedly converted a substantial amount of digital assets into cash at an unnamed Swiss bank, with bitcoins worth as much as $100 million being converted over a period of months and then transferred to third parties, as finews.com previously reported.
Do Kwon himself is currently being investigated by the US Securities and Exchange Commission (SEC) and South Korean prosecutors after being arrested as a fugitive in Montenegro following what seems like a relatively adventurous attempt to escape authorities.
Converted and Transferred
Crypto-industry portal «Finbold», citing South Korean news service «Digital Asset» maintains the bank in question was Sygnum, one of two domestically licensed digital asset banks. They indicate the information came from a press conference in Seoul held by the prosecutors, currently investigating a number of involved parties. According to them, the investigators pointed to numerous transactions involving Sygnum.
The Swiss bank declined to say anything when asked by finews.asia. Other sources close to the situation, however, maintain that Sygnum converted the assets based on an official court order.
Salary Payments
The same sources indicate that Sygnum maintained a business relationship with Do Kwon and Terraform Labs. As a result of the court order, it transferred more than 70 percent of the converted bitcoin worth about $100 million to an escrow account at an international law firm, with the «Finbold» report mentioning the Kim & Chang law firm in that regard.
The remaining sum was used last summer to pay salaries and bills owed by Terraform Labs. The SEC investigations kept Sygnum's name under wraps although neither it nor other regulatory authorities believe that it has done anything wrong. The sources also maintain that Sygnum itself does not expect official ramifications as a result of what is currently going on.
Under Observation
Still, just being involved in the case is a sensitive issue for the crypto-pioneer, as it remains under heightened scrutiny. It attracted substantial client assets and new business following FTX's collapse last November. One of the reasons for that is that it is a regulated entity in a poorly regulated market and its reputation as a safe haven could be sorely tested if it continues to be linked with the Do Kwon case.
