South Korean prosecutors behind the Terraform Labs investigation have executedreportedly a search and seizure at 15 companies, including 7 cryptocurrency exchanges.
According to a Wednesday report by News1 Korea, the Seoul Southern District Public Prosecutor’s Joint Securities and Financial Crimes Investigation Team raided the offices of Upbit, Bithumb, Coinone, Korbit, and Copax, as well as other companies related to the collapse. of Terra. Apparently, the authorities obtained data related to the transactions of TerraUSD (formerly UST) and Terra (LUNA) -now Luna Classic (LUNC)-, in which some 200,000 Korean investors suffered losses after the severe devaluation of the price of the tokens and their subsequent collapse in May.
Some of the victims of the Terra collapse and UST downgrade have reportedly appointed the local law firm LKB & Partners to represent them in a lawsuit against Terraform Labs and its co-founder Do Kwon, alleging that the company committed fraud. More than 100 people who filed complaints with the prosecution reportedly had losses totaling some USD 8 million.
“Defendants failed to properly report design errors and algorithm flaws while designing and issuing the Luna and Terra coins in a collusion to attract investors”said a spokesman for LKB & Partners.
Following the bankruptcy of UST and LUNA, the South Korean national tax agency reportedly imposed a USD 78 million penalty on Terraform Labs and Kwon for tax evasion. The country’s legislators also called on Kwon to speak at a parliamentary hearing regarding the events surrounding the collapse of Terra and the disengagement of UST.
Although based in South Korea, Terraform Labs and the events surrounding the collapse of its tokens have had wide-ranging implications in the cryptocurrency space. In the US, investors affected by the fall of UST and LUNA hinted at legal action against the yield-generating app Stablegains for the alleged loss of $44 million worth of deposited funds.
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