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Terraform Labs in trouble as South Korean authorities ramp up investigation

Terraform Labs in trouble as South Korean authorities ramp up investigation

After the infamous Terra Luna crash, South Korean authorities are actively investigating the matter to leave no stone unturned.

Terraform Labs is also facing a 100 billion Won ($78.5 million) fine for evading corporate taxes in South Korea. Terraform Labs is also facing a 100 billion Won ($78.5 million) fine for evading corporate taxes in South Korea.

Terraform Labs, the parent company of the cryptocurrencies, Terra Luna and TerraUSD, is under investigation by the South Korean authorities after the infamous Terra Luna crash. 

As reported by local media, the South Korean Minister of Justice, Han Dong-hoon is actively involved in the investigation.  

Moreover, the country has also revived a special joint financial and securities crime investigation unit called Yeouido Grim Reaper, after over 2 years of inactivity.  

To add to the harsh investigation, Terraform Labs is also facing a 100 billion Won ($78.5 million) fine for evading corporate taxes in South Korea. 

The whole issue gets murkier as official documents reveal that Do Kwon had liquidated Terraform Labs days before the TerraUSD de-pegging and Terra Luna crash.  

Local media claims that Kwon was dissatisfied with the tax policies in the country and was planning to move base to Singapore. 

The South Korean government and the authorities are actively investigating the matter because over 2,80,000 South Korean individuals have lost their life savings in the crash and atleast eight people have committed suicide in the matter. 

Last week, TerraUSD, the stablecoin pegged to the US Dollar, minted by Terraform Labs, lost its peg and crashed over 40 per cent causing Terra Luna, the volatile cryptocurrency by the same company, to wipe out 100 per cent depleting investors wealth. 

This crash also had a domino effect in the whole crypto ecosystem because Luna Foundation Guard, the non-profit arm of Terraform Labs was the largest holder of Bitcoin and also had reserves of several other cryptocurrencies, which they dumped in the market in an attempt to save their native tokens. 

As per data from CoinMarketCap, Terra Luna is trading 20.26 per cent down at $0.0001469, as of 9:00 am IST on Thursday. 

Also read: Washout! Terra down 100%, crypto exchanges de-list LUNA and UST 

Also read: Terra Luna crash turns value of 4th biggest crypto to zero, all cryptocurrencies in free fall

Published on: May 19, 2022, 9:42 AM IST
Posted by: aakanksha chaturvedi, May 19, 2022, 9:39 AM IST