Crypto News: South Korean Authorities To Probe Staff Behind Terra

The South Korean government is apparently questioning personnel of Terraform Labs, the company behind the Terra Network, Luna (LUNC), and Terra USD (UST) tokens. 

iexclusivenews reports that according to the local news station JTBC, South Korean authorities have summoned all Terraform Labs personnel as part of a full-scale inquiry into the collapse of UST and LUNC. 

This online news outlet understands that the investigation is being carried out by the Seoul Southern District Prosecutors Office’s combined financial and securities criminal investigation team, according to the article.

Authorities are investigating the situation to see whether there was any evidence of price manipulation and if the tokens went through legitimate listing processes. 

The investigators also said that the process behind Terra tokens was flawed from the start since UST is not tied to a reliable collateral or profit scheme.

“At some point, it will have no choice but to collapse since it cannot sustain interest payments and value swings,” authorities are believed to have remarked. 

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Luna investors sued Terraform Labs CEO Do Kwon and co-founder Shin Hyun-seun in mid-May, seeking a record of user accounts, marketing materials, and UST-related conversations, as previously reported.

Investors are said to have lost up to $44 million in deposited cash when LUNC fell 99 percent and UST lost its 1:1 peg to the US currency. 

Some accounts claim that Terraform Labs shut its South Korean unit days before the Luna and UST collapses, with some assuming that Kwon closed the local operation to avoid paying taxes. Terraform Labs and its co-founder were finally fined $78 million by South Korea’s national tax authorities for tax fraud. 

Meanwhile, iexclusivenews Nigeria reports that the announcement comes as Terraform Labs relaunched Terra 2.0, a new chain aimed at reviving the Terra ecosystem, on May 28. Binance and FTX, two major crypto exchanges, stated they were working closely with the Terra team to promote the next airdrop to assist concerned individuals. Many investors dumped on Terra 2.0 as the new LUNA coin became live, causing the price to drop by 70%.