SEC identified suspicious movement of funds from Terraform Labs

The US Securities and Exchange Commission (SEC) announced that it has detected suspicious movements of funds in Terraform Labs accounts.. The company paid Dentons US lawyers. LLC $166 million before filing for bankruptcy.

90 days before filing for bankruptcy, Terraform Labs transferred $122 million to Dentons lawyers. The law firm later received another $44 million.

The SEC demanded that the Delaware bankruptcy court refuse to allow Terraform Labs to involve Dentons lawyers in the process.. The regulatory agency believes that Dentons is involved in the withdrawal of money from Terraform Labs, which, among other things, could have been used to pay for executive decisions.

The SEC believes that the funds were transferred to a special fund in order to hide them from the US authorities and pay for legal advice to the co-founder of the Terra project, which collapsed in 2022, Do Kwon.

Dentons currently has $81 million left in its accounts.. The regulator believes that the law firm cannot represent the interests of Terraform Labs until it returns all funds to the bankrupt company.

Previously, a Montenegro court ruled that the co-founder of Terraforms Labs should be extradited to the United States. In America, Do Kwon will stand trial on charges of crypto fraud.