The Securities and Exchange Commission (SEC), the U.S. government regulator responsible for protecting investors and ensuring compliance with capital market rules, has filed a complaint against Do Kwon, a South Korean national who allegedly transferred 10,000 Bitcoin (BTC) from Terra Exchange to a Swiss bank account.
The complaint was filed in the U.S. District Court for the Eastern District of New York and alleges that Do Kwon transferred the Bitcoin without revealing its true origin and with the expectation that funds could be sent back to his home country.
According to the complaint, after Do Kwon had transferred the Bitcoin, Terra Exchange, a cryptocurrency exchange based in Korea, identified and froze the account from which the transfer was made. Terra Exchange then alerted the Financial Intelligence Unit (FIU) of South Korea to investigate the matter.
It was discovered that Do Kwon had used several other entities and instruments to conceal the origin of the Bitcoin and to ultimately pay for services in Switzerland.
The SEC has accused Do Kwon of engaging in fraud by failing to disclose his intent to take U.S. dollars out of the country and failing to register his transfers with the SEC. Do Kwon is also alleged to have committed violations of anti-money laundering statutes by failing to declare his financial transactions to the U.S. authorities.
The SEC believes that Do Kwon’s actions were made with the intent to defraud investors and regulatory agencies. In addition, the SEC claims that Do Kwon transferred the funds to a Swiss bank account with the expectation that the funds would be sent back to South Korea.
If found guilty of the charges brought against him, Do Kwon faces criminal charges which could lead to potential fines, imprisonment and other civil and criminal penalties.
This complaint is an important reminder of the risk of conducting illicit financial activities in the cryptocurrency space. With cryptocurrency being largely unregulated, investors should always be aware of the risks associated with such transactions, and be vigilant in ensuring that the funds they handle are being moved in accordance with the law.
