Swiss prosecutors have taken possession of approximately $26 million worth of crypto assets and US dollars belonging to Do Kwon, the imprisoned co-founder of Terraform Labs (TFL).

Now, the New York Federal Prosecutors Office and the United States Securities and Exchange Commission (SEC) have reportedly requested Swiss prosecutors to freeze cryptocurrency assets and fiat currency associated with Terraform Labs.

Allegedly, the assets in question were stored at Sygnum Bank, a bank that positions itself as the world’s inaugural digital assets bank and operates branches in Switzerland, Singapore, and Abu Dhabi.

The US SEC claims that Do Kwon had utilized a Swiss banking institution to convert 10,000 BTC into cash following the collapse of LUNA/UST in 2022.

Legal Woes Intensify For Do Kwon

Dentons, a leading law firm representing Terraform Labs and co-founder Do Kwon, has submitted additional documents as part of a motion to dismiss the lawsuit filed by the US Securities and Exchange Commission (SEC).

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This move actively challenges the SEC’s lawsuit and aims to seek dismissal of the case as it has been revealed that the seized assets totaling $26 million in cryptocurrency and USD do not solely belong to Kwon.

Other individuals impacted by the asset seizure include Chang-Joon Han, the former CEO of Chai Corporation, Nicholas Platias, who served as the head of the TFL research team, and TFL Corporation itself.

The recent action follows closely after Kwon was sentenced to four months in prison by the Basic Court in Podgorica. On June 19, a court in Montenegro delivered a verdict stating that defendants Do Kwon and Han Chang-Joon had utilized counterfeit Costa Rican passports while attempting to board a flight to Dubai in March. Consequently, both individuals were sentenced to four months of imprisonment.

It is important to note that the sentence takes into account the time the individual had already spent in custody, which was from March 23 until June 15. This means that his actual time in jail could be approximately one month, considering the period already served.

The Montenegro high court is currently seeking to extradite both South Korean citizens back to their home country. The court is aiming to expedite the extradition proceedings in order to conclude them swiftly.

Prosecutors in South Korea have taken further action by filing a petition to seize approximately $176 million worth of cryptocurrencies and luxury items belonging to Kwon. This legal request, known as a seizure manifest, aims to claim assets associated with the accused individual. In May, the Seoul Southern District Court approved the appeal.

According to South Korean prosecutors, if Do Kwon is extradited to South Korea, he could potentially face a prison sentence of up to 40 years.

According to a Montenegrin news outlet, Do Kwon is currently being held in a state of isolation at Spuz prison, separate from other inmates.