South Korea seeks to freeze $62 million of bitcoin linked to crypto founder Do Kwon as manhunt continues

South Korean authorities sought Kwon’s arrest this month and claimed he was in hiding. Prosecutors said Interpol, the global police organization, had issued a “red notice” for Kwon. Such notices are issued for fugitives wanted for prosecution or to serve a sentence.

However, Kwon insists he is not hiding and said on Twitter on Tuesday that he is “not making any effort to hide.” The crypto founder claims to go for walks and code in his living room.

The Seoul Southern District Prosecutor’s Office declined to comment on how they determined the bitcoin was linked to Kwon.

But research from analytics platform CryptoQuant suggests that Luna Foundation Guard (LFG) created a digital wallet on September 15 and sent 3,310 bitcoins to KuCoin and OKX. Luna Foundation Guard is a non-profit organization aimed at promoting the Terra blockchain, created by Kwon’s company Terraform Labs.

LFG responded on Tuesday, saying it had not created new wallets or moved bitcoins or other digital currencies since May 2022. It also posted its wallet address on Twitter.

But CryptoQuant replied, “It’s the public one,” suggesting that Luna Foundation Guard has another wallet address not specifically associated with the nonprofit.

Kwon also refuted claims of moving bitcoins.

He said on Twitter that there was no attempted “withdrawal” and that he had not used KuCoin or OKX “for at least the last year.” He added that no funds of Terraform Labs, LFG or other entities were frozen.

KuCoin told CNBC on Wednesday that it is “ready to cooperate with all global law enforcement agencies when it comes to investigative cases related to the origin and freezing of suspected assets.”

It added that regarding Kwon and South Korean prosecutors’ request to freeze funds related to the crypto founder, “we would like you to first approach all relevant authorities and clarify their position on the matter.”

CNBC told KuCoin that it has already spoken to authorities. A spokesperson for KuCoin said the company “cannot disclose any details in order not to interfere in the case.”

An OKX spokesperson confirmed that it had received a request from Korean authorities and that it was “cooperating with their investigation.”

“OKX condemns all illegal transactions in the sector. As this is an ongoing investigation, OKX is unable to offer further comment at this time,” the spokesperson added.