South Korean Police Ask Exchanges to Freeze Funds Related to Luna Foundation Guard

South Korean Police Ask Exchanges to Freeze Funds Related to Luna Foundation Guard

South Korean cryptocurrency exchanges have received police notices requesting the seizure of funds related to the Luna Foundation Guard.

On Monday, Korean authorities sent a request to the country’s large cryptocurrency exchanges to prevent funds from being withdrawn. Specific, the Seoul Metropolitan Police Agency requested that the Luna Foundation Guard be prohibited from taking any action. Police say clues have been found that may link the organization to embezzlement.

The crash of the Luna/Terra algorithmic stablecoin, which reduced the value of the coin by more than 99%, wrecked investor wallets overnight earlier this month.

Nevertheless, This request is not a lawsuit and is not enforceable by law. Each exchange can choose how they want to respond, but it is not yet known how they will react.

Several prominent Korean investors have called for Terraform Labs CEO Do Kwon to be investigated and sued over the collapse of the TerraUSD (UST) stablecoin. This triggered the revival of “Grim Reaper,” a Korean securities and financial crime joint investigation team.

Korean lawmakers have come to meet with the executives of each of these exchanges, including Upbit, Bithumb, Coinone, Korbit and Gopax. Since they are not required to comply with the regulations, this meeting is probably a measure to put pressure on those responsible for these exchanges.

According to Newspim, Yoon Chang-Hyeon, chairman of the Popular Force Virtual Assets Special Committee, said on Facebook, “We will check exchanges’ investor protection measures.”

It is reasonable to expect exchange representatives to be held accountable, in some way, for the damage caused to investors by the fall of Terra (LUNA), the outlet reported. Newspim also reported that the Korean National Assembly is taking the initiative to regulate the punishment in this matter.

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Two of the exchanges had already issued warnings on their websites, Coinone has already halted LUNA trading as of May 11 and Binance had also suspended some spot trading.

Although this official report adds to the larger story in progress, the solicitation of cryptocurrency exchanges and the Do Kwon investigation are unrelated. The actions of the National Assembly and the Korean authorities make it clear that Korea is willing to take whatever steps are necessary to get to the bottom of the imbroglio of the collapse of the Terra ecosystem.

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