Key Takeaways:
- Terra Labs’ founder, Do Kwon, might have known of the platform’s impending failure
- Ex-Deutsche Bank employee indicted of crypto-related Ponzi scheme
NEW DELHI (CoinChapter.com) — Frauds continue to hurt investors’ trust in the crypto market, as news of Terra founder Do Kwon allegedly being aware of Terra’s impending collapse in May last year.
Per a report in KBS News, Kwon sent 9 billion Won ($7 million) to Kim & Chang, one of the top law firms in South Korea. Though retaining a law firm is normal, what is suspicious is that Do Kwon made the payment right before the Terra Luna collapse.
The KBS report stated that the South Korean prosecutors and law enforcement authorities were actively tracing the source of the money. Additionally, the prosecutors believe that tying Kwon’s ill intent in paying the firm would help in the fraud case.
“The fact that they sent a large sum of money to a large law firm before the crash could be seen as a situation in which they were prepared for judicial risks such as the prosecution’s investigation.“
Attorney Choi Chang-min told KBS
Moreover, authorities stated that they might file embezzlement charges if the firm, or Kwon, cashed in crypto assets to pay the law firm.
Ex-Deutsche Bank Employee Indicted Of Crypto Scam
In other news, an ex-Deutsche Bank investment banker, Rashawn Russell, was accused by US authorities of running a Pozni-like crypto scam. Russell allegedly defrauded investors by promising “guaranteed” returns from their investments in the crypto sector.
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Prosecutors alleged that Russell fabricated documents to dupe investors. The banker lied to his investors about the state of their crypto investments. Then, similare Ponzi scheme, Russell used the funds from a few investors to repay others.
Furthermore, the ex-Deutsche employee often encouraged the victims to roll over their investments. Rolling over refers to carrying forward an investment’s futures position.
Russell also inflated the bank balance of his accounts through falsified documents. Additionally, the banker shared fake screenshots of transferring funds from his firm, R3 Crypto Fund, to investors.
Meanwhile, Russell pled not guilty to the charges and was released on a bail of $200,000. Deutsche Bank said it was “cooperating with authorized investigations and proceedings.”
