South Korea Seeks to Freeze 3,313 Bitcoin Allegedly Linked to Luna Founder Do Kwon

South Korean prosecutors are seeking to freeze 3,313 bitcoins at two cryptocurrency exchanges allegedly tied to luna founder Do Kwon. The coins were moved soon after a South Korean court issued an arrest warrant for the Terraform Labs co-founder. Luna Foundation Guard has denied transferring the coins. Korean Authorities Ask Crypto Exchanges to Freeze Bitcoin.

South Korean authorities have reportedly asked cryptocurrency exchanges Kucoin and Okx to freeze 3,313 bitcoins allegedly tied to Terraform Labs co-founder Kwon Do-hyung, also known as Do Kwon. The coins were transferred to the trading platforms soon after a warrant was issued for Kwon’s arrest in South Korea.

On Tuesday, an official at the Seoul Southern District Prosecutors’ Office confirmed to Bloomberg that requests have been sent to the two cryptocurrency exchanges to freeze the 3,313 BTC.

The coins were transferred to the trading platforms from a wallet allegedly linked to Luna Foundation Guard (LFG) that was created on Sept. 15, according to crypto researcher Cryptoquant. The researcher told the publication: Cryptoquant specified new bitcoin addresses owned by LFG based on transaction patterns, adjacent flows and material non-public information.

However, Luna Foundation Guard denied the allegation Tuesday evening. The group tweeted its treasury’s bitcoin address, adding: “LFG hasn’t created any new wallets or moved BTC or other tokens held by LFG since May 2022.” Do Kwon Says: ‘I’m Making Zero Effort to Hide’

The luna founder’s whereabouts are currently unknown. He was believed to be in Singapore but the Singapore police force said earlier this month that he is currently not in the city-state. Kwon has maintained that he is not “on the run,” tweeting Monday: I’m making zero effort to hide. I go on walks and malls.

The Seoul Metropolitan Police have asked various crypto exchanges to ban Luna’s capability of withdrawing company funds, the report said. It was not clear which exchanges were asked or whether they have complied. Terraform Labs lost $30 billion this month when Terra’s UST stablecoin and LUNA cryptocurrency went into a death spiral, costing investors billions globally.

The associated Luna Foundation Guard was charged with protecting UST’s peg using a war chest of billions of dollars in bitcoin (BTC); it ultimately failed. Terraform Labs CEO Do Kwon is already under the financial crimes microscope and is facing a tax evasion investigation by a South Korean police unit known as the “Grim Reaper.” Luna Foundation Guard did not respond to a request for comment by press time.

A South Korean court issued an arrest warrant for Kwon on Sept. 14. He is accused of fraud after the collapse of the cryptocurrency luna (now called luna classic (LUNC)) and stablecoin terrausd (UST). In addition, the country’s ministry of foreign affairs is reportedly planning to revoke his passport.

Moreover, Interpol has issued a Red Notice for the Terraform Labs co-founder. “A Red Notice is a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action,” Interpol’s website details, adding that “Red Notices are issued for fugitives wanted either for prosecution or to serve a sentence.”

By: Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Source: South Korea Seeks to Freeze 3,313 Bitcoin Allegedly Linked to Luna Founder Do Kwon – Featured Bitcoin News

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When the Luna crypto network collapsed, it’s estimated that $60 billion got wiped out of the digital currency space. Algorithmic stablecoins (UST) are not the same as Tether or USD Coin, which are backed by actual dollars or assets stored in a bank. An arrest warrant has been issued for Do Kwon, the co-founder of Terraform Labs, where the sister tokens Luna and TerraUSD were held.

Terra network and its leader, Do Kwon, rose to prominence in the cryptocurrency world over the course of four years, all ending in a disastrous fall from grace. The Luna crypto network collapsed in what’s considered the largest crypto crash ever, with an estimated $60 billion wipeout, shaking the global digital currency market.

There are two stories regarding Luna crypto: the TerraUSD/UST stablecoin and the actual Luna coin. Once Luna and UST crashed, there was a total liquidity crunch in the cryptocurrency space that caused an even more catastrophic loss of value. The crypto community still hasn’t recovered.

You may have heard of TerraUSD and Luna, here is a quick breakdown of what they are exactly. Lots of moving parts within the Luna network ahead of its collapse.TerraUSD (also known as UST) and Luna are two sister coins on the same network.

Terra is a blockchain network, similar to Ethereum or Bitcoin, that produces Luna tokens. The network was created in 2018 by Do Kwon and Daniel Shin of Terraform Labs. Terraform Labs created the UST coin to be an algorithmic stablecoin on the Terra network. While other stablecoins (USDC or Tether) are fiat-backed, the UST would not be backed by real assets. Instead, the value of UST would be backed by its sister token, Luna. More on that later.

Stablecoins are supposedly safe havens in the crypto space since they’re meant to have a fixed value of around 1 USD. The goal being, a steady store of value for investors, unlike other volatile coins (like ethereum).Luna was Terra’s blockchain native token, similar to how ether is used on the Ethereum network. Luna had four different roles in the Terra network:

  1. A method to pay for transaction fees in the Terra network.
  2. A mechanism for maintaining Terra’s stablecoin peg.
  3. Staking in Terra’s delegated proof of stake (DPoS) to validate network transactions.
  4. Participation in the platform’s governance by adding to and voting on proposals when it comes to changes in the Terra network.

How much was Luna worth?

A Luna coin was going for around $116 in April and ended up dropping to a fraction of a penny before being delisted. Before that, the coin went from being worth less than $1 in early 2021 to creating many crypto millionaires within a year. This led to Kwon’s cult hero status among (some) retail crypto investors. Many success stories popped up in the media about how regular folks were able to get rich from Luna.

The Luna token skyrocketed about 135% in less than two months until its peak in April 2022. The largest incentive was that you could stake your UST holdings on the Anchor lending platform for a 20% annual yield. Many analysts felt that this absurd rate was unsustainable.

The Anchor Protocol was a decentralized money market built on the Terra blockchain. This platform became popular for its aforementioned 20% yield for UST holders who deposited their tokens on the platform. Then Anchor would turn around and loan the deposit to another investor. Many skeptics were concerned about where the money came from to pay these rates. Some considered this an obvious Ponzi scheme. At one point, as much as 72% of UST was deposited in Anchor because the platform was the primary driver of demand for Terra.

What happened to UST?

Before we look at this crypto disaster, we need to discuss stablecoins briefly. A stablecoin is pegged to a more stable currency like the US dollar. Tether and USDC are both tied to USD. Stablecoins are used to hedge against volatility in the crypto space. For example, let’s say that Ether’s price is $1,000. You could exchange one Ether for 1,000 USDC tokens. When investors expect a hit in the crypto market, they put their money into stablecoins to protect their assets.

The UST coin was not backed by an actual US Dollar but rather an algorithmic stablecoin. The belief was that Terraform Labs could use clever mechanisms along with billions in Bitcoin reserves to maintain the peg of UST without the backstop of the USD. To create UST you have to burn Luna. So, for example, when Luna token’s price was $85, you could trade one token for 85 UST. This deflationary protocol was designed to ensure there was long-term growth for Luna.

For UST to retain its peg, one UST could be changed for $1 worth of Luna at any time. If UST slipped, traders could make money from buying UST and then exchanging it for Luna. Both Luna and UST crashed once UST lost its peg to the dollar, which was what qualified it as a stablecoin.

TerraUSD was risky because it wasn’t backed by cash, treasuries or other traditional assets like the popular stablecoin tether. The stability of UST was derived from algorithms that linked the value to Luna. Many experts were skeptical that an algorithm could keep two tokens stable.

Why did LUNA crash?

The Luna crypto crash was caused by its connection to TerraUSD (UST), the algorithmic stablecoin of the Terra network. On May 7, over $2 billion worth of UST was unstaked (taken off the Anchor Protocol), and hundreds of millions of it were quickly liquidated. There’s debate as to whether this happened as a response to rising interest rates or if it was a malicious attack on the Terra blockchain. The huge sell-offs brought down the price of UST to $0.91, from $1. As a result, traders started to change 90 cents worth of UST for $1 of Luna.

Once a large amount of UST had been offloaded, the stablecoin started to depeg. In a panic, more people sold off UST, which led to the minting of more Luna and an increase in the circulating supply of Luna. Following this crash, crypto exchanges started to delist Luna and UST pairings. Long story short, Luna was abandoned as it became worthless.

What happened after the Luna crash?

The Luna meltdown impacted the entire cryptocurrency market, which was already highly volatile and experiencing difficulty at the time. It’s estimated that the Luna crash ended up tanking the price of bitcoin and causing an estimated loss of $300 billion in value across the entire cryptocurrency space. Crypto leaders Voyager and Celsius filed for bankruptcy. Three Arrows Capital (3AC) was forced into liquidation.

Many people lost their life savings and suffered financial hardships due to the Luna crypto crash. If you do a quick search online, you’ll find many of these terrible stories. Many loyal Luna fans (who referred to themselves as “Lunatics”) took to Reddit threads to share their disastrous stories. One retail crypto investor even confessed that they lost their savings of $20,000 in Luna.

The only winners were those who exited their positions before the crash. One winner that we have to highlight is the hedge fund Pantera Capital. They saw a 100x return on an initial investment of $1.7 million. The company liquidated its Luna position prior to the collapse for a return of $171 million.

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Covid Science: Virus Leaves Antibodies That May Attack Healthy Tissues

The following is a summary of some recent studies on COVID-19. They include research that warrants further study to corroborate the findings and that has yet to be certified by peer review.

Coronavirus leaves survivors with self-attacking antibodies

Months after recovering from SARS-CoV-2 infection, survivors have elevated levels of antibodies that can mistakenly attack their own organs and tissues, even if they had not been severely ill, according to new findings.

Among 177 healthcare workers who had recovered from confirmed coronavirus infections contracted before the availability of vaccines, all had persistent autoantibodies, including ones that can cause chronic inflammation and injury of the joints, skin and nervous system.

“We would not normally expect to see such a diverse array of autoantibodies elevated in these individuals or stay elevated for as long six months after full clinical recovery,” said Susan Cheng of the Cedars-Sinai Smidt Heart Institute in Los Angeles.

Patterns of elevated autoantibodies varied between men and women, the researchers reported on Thursday in the Journal of Translational Medicine.

“We don’t yet know how much longer, beyond six months, the antibodies will stay elevated and/or lead to any important clinical symptoms,” Cheng said. “It will be essential to monitor individuals moving forward.”

Her team is investigating whether autoantibody elevations are linked with persistent symptoms in people with long COVID and planning to study autoantibody levels after infections with newer variants of the virus.

B cells’ effects weakened but not defeated by Omicron. The effects of antibodies produced by the immune system’s “memory B cells” against the Omicron variant of the coronavirus, while weakened, could still be significant, researchers believe.

Once the body learns to recognize SARS-CoV-2, either after infection or vaccination, B cells generate fresh antibodies against the virus if there are not already enough antibodies circulating in the blood that can neutralize it.

In a study reported on bioRxiv ahead of peer review, researchers analyzed the strength of more than 300 antibodies produced by memory B cells obtained from vaccinated volunteers, including some who had a prior SARS-CoV-2 infection.

“Omicron seemed to evade a very large share of the memory B cells pool,” researchers said, adding that it “seems to still be efficiently recognized by 30% of total antibodies and close to 10% of all potent neutralizing antibodies,” said Matthieu Mahevas and Pascal Chappert of Universite de Paris in a joint email. Memory B cells’ robust ability to proliferate and produce antibodies might compensate “in less than two days” for those antibodies’ reduced effectiveness, they speculate.

In combination with other immune system components, particularly T cells, the effects of B cells likely help to explain why most vaccinated individuals who become infected do not become sick enough to require hospitalization, they said.

Virus variants’ activity in cells makes them more effective. Along with spike mutations that help the coronavirus break into cells, mutations that change how the virus behaves inside the cells are a big factor in why some variants have been more transmissible, researchers have discovered.

The findings, published in Nature, show that scientists “have to start looking at mutations outside the spike,” which has so far been the main focus of vaccines and antibody drugs, said Nevan Krogan of the University of California, San Francisco.

Studying the Alpha variant, his team found a mutation at a non-spike site that causes infected cells to ramp up their production of a protein called Orf9B. Orf9b in turn disables a protein called TOM70 that cells use to send signals to the immune system.

With higher levels of Orf9B disabling TOM70, the immune system does not respond as well and the virus can better evade detection, the researchers said.

Referring to the increase in Orf9B, Krogan said, “It’s rare that mutations ‘turn up’ a protein. It’s a very sneaky thing for this virus to do.” The same mutation was identified on Delta, “and sure enough, almost the same mutation is on Omicron,” he said, which suggests they may have similar effects on the immune system. The new information could spur development of drugs that target the interaction of Orf9b and TOM70.

Click for a Reuters graphic on vaccines in development.

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Source: Covid Science: Virus leaves antibodies that may attack healthy tissues | Reuters

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The IRS Goes Undercover As A Bitcoin Trader In $180,000 Sting

On the hunt for tax cheats, fraudsters, money launderers and dark web drug dealers, the Internal Revenue Service (IRS) has sent an undercover agent to work on a market for trading bitcoin, ether and other cryptocurrency.

In a search warrant reviewed by Forbes, the undercover IRS agent went by the name of “Mr. Coins” on LocalCryptos.com, a platform exchanging cryptocurrency for dollars and other fiat currencies. Mr. Coins’ profile, still live at the time of publication, had 100% positive feedback after shifting up to $200,000 in digital money.

But his biggest success may have been to take down an alleged dark web drug dealer, tricking him into sending more than $180,000 in cash to the IRS in exchange for cryptocurrencies, according to the warrant.

In June of last year, Mr. Coins put up an advertisement offering to buy bitcoin via cash by mail and above market prices. All sellers had to do was get in touch over encrypted messaging apps Wickr or WhatsApp.

Shortly afterward, a person going by the name “Lucifallen21” got in touch to inquire about the ad, according to the search warrant. The IRS, without saying how, determined that Lucifallen21 was actually Evansville, Indiana, resident Chase Hite. By July, he’d agreed to buy from Mr. Coins, wrapping up $15,040 in cash in clothes, putting the money in a box and posting it to the agent in exchange for approximately 1.59 bitcoin, according to the government’s account.

More payments came in, with nearly $20,000 posted in August, in exchange for approximately 1.34 bitcoin and 45.2 monero, another cryptocurrency that promises better privacy protections than its rivals, the government said, adding that nearly $65,000 was sent to the agent over following months.

Come March this year, investigators were getting ready to home in on the conclusion to the sting operation. A $28,000 cash package from Hite was intercepted and marked as lost by the Postal Service, according to the IRS, which then monitored calls to the post office, waiting for the suspect to call and complain. Investigators linked this call with a phone number that was paid for by Hite.

Further messages over Wickr indicated Hite was involved in dark web drug sales, claiming to sell “pills and opioids,” as well as cocaine and marijuana, the IRS claimed. As they deepened their relationship, the undercover officer agreed to provide Hite with a loan, by which the suspect would send $54,000 in cash and get $79,000 worth of cryptocurrency in return, according to the search warrant. When that last package arrived, forensics took fingerprints and linked them to Hite, the government added.

Hite was arrested in July and has not yet filed a plea. The charges were filed in the Eastern District of New York. His lawyer declined to comment. LocalCryptos hadn’t responded to requests for comment. The IRS declined to provide more information than what had been filed in court.

The tax collecting agency has a track record of going undercover to snare cryptocurrency-using criminals. Earlier this year, it was revealed that the agency had organized a payment to a service called Bitcoin Fog, which offered to launder money.

The agents said they wanted to launder cryptocurrency they’d earned by selling Ecstasy, according to a criminal complaint, first reported by Wired, in which a Russian-Swedish administrator was charged. And in March, the IRS pretended to be a seller of counterfeit Gucci products sourced from China, asking the defendant in that case to convert bitcoin that they claimed to have acquired in selling the merchandise.

But this latest sting is a rare case where the IRS set up a profile on a cryptocurrency trading platform and created what amounts to a watering hole, with agents just waiting for criminals to dive in.

This story is part of The Wire IRL feature in my newsletter, The Wiretap. Out every Monday, it’s a mix of strange true crime and real-world surveillance, with all the relevant search warrants and court documents for you to pore over. There’s also all the cybersecurity and privacy news you need to read. Sign up here.

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I’m associate editor for Forbes, covering security, surveillance and privacy. I’m also the editor of The Wiretap newsletter, which has exclusive stories on real-world

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