South Korea-based prosecutors at the back of Terraform Labs’ investigation have reportedly initiated an operation against fifteen companies to analyze and seize them, taking into account 7 crypto exchanges.
Top Crypto Exchanges Undergo Accusations of Terra Crash
As per a report from a native news agency, Seoul Southern District Prosecutors Office’ Joint Financial and Securities Crime Investigation Team raided Copax, Korbit, Coinone, Bithumb, and Upbit’s offices along with the rest of the businesses linked to Terra’s crash. Authorities reportedly gathered data dealing with the transactions in TerraUSD (UST) and Luna Classic (LUNC) in which nearly 200,000 investors within Korea experienced losses after the extreme price devaluation as well as the eventual crash of the tokens in May.
A few of the sufferers of the de-pegging of UST from the US dollar and the collapse of Terra reportedly hired a native law firm named L.K.B. & Partners for their representation in a legal case confronting Terraform Labs and Do Kwon (its co-founder), accusing that they were defrauded by the firm. Up to a hundred individuals who submitted complaints with the office of the prosecutors have cumulative losses of approximately $8M.
Terraform Labs and Its Co-Founder Countered with a Lawsuit over Defrauding
No adequate information has been provided by the defendants regarding the defects and design errors present in the algorithm at the time of structuring as well as releasing Terra and Luna coins in an attempt to allure the investors, as stated by an L.K.B. & Partners’ spokesperson. After LUNA and UST’s collapse, the national tax authority of South Korea reportedly directed Kwon and Terraform Labs to recompense an amount of $78M as a penalty for tax evasion.
Apart from this, Kwon was also invited by the native lawmaking entities to attend a parliamentary hearing dealing with the incidents connected to UST’s de-pegging and Terra’s collapse. Although Terraform Labs’ headquarters are established in South Korea, the entity itself as well as the events encompassing the collapse of its tokens have put a great impact on the overall world of cryptocurrency.
The LUNA and UST investors residing in the United States – after going through the disastrous collapse, de-pegging, as well as the resulting losses – pointed toward a legal action to reclaim an amount of almost $44M in deposited funds.