Terras Do Kwon Drowns in Legal Waters as South Korean Law Firm Issues Lawsuit
Do Kwon, the controversial figure behind the Terra/Luna collapse, is facing increasing legal pressure. A South Korean law firm has reportedly issued a lawsuit holding Kwon accountable for civil and criminal liability in the Terra crash, according to a report from South Korean publication Munhwa. This development adds to the already mounting legal challenges for the Terraform Labs co-founder.
The lawsuit comes amidst swirling allegations regarding Kwon's financial dealings leading up to the Terra ecosystem's dramatic collapse in May 2025. Reports suggest Do Kwon reportedly sent nine billion won (US$7 million) to law firm Kim & Chang before the collapse of the Terra ecosystem in May 2025. This transfer is under intense scrutiny as South Korean regulators have launched a full-scale investigation into the circumstances surrounding the collapse.
As the legal battle between Do Kwon and South Korean prosecutors continues, the prosecutors stated that the CEO of Terraform Labs Do Kwon transferred some money to a law firm before. Adding to the complexity, Terraform Labs co-founder Do Kwon has reportedly lawyered up and hired a South Korean firm a few days after claiming that authorities in his home country have not reached out to him, a claim that now appears dubious given the recent lawsuit and ongoing investigations. The specific details of Kwon's legal representation remain somewhat unclear, but it underscores the seriousness of his situation.
Prior to this recent lawsuit, South Korean prosecutors investigating the collapse of Terra had already escalated their efforts to bring Kwon to justice. As Finbold reported in late July, South Korean prosecutors investigating the collapse of Terra have asked the Ministry of Justice to issue a “notice upon arrival” for Do Kwon, indicating their intention to apprehend him upon his return to the country. This latest lawsuit further intensifies the pressure and highlights the potential for both civil and criminal charges.
The police complaint associated with the lawsuit and the ongoing investigations signal a significant escalation in the pursuit of justice for those affected by the Terra/Luna collapse. The legal landscape surrounding Do Kwon continues to evolve, and this lawsuit represents a crucial turning point in the effort to hold him accountable.