Terraform Labs, along with Do Kwon (its co-founder), keeps on moving toward additional legal problems at the time of a collapse that took place in the ecosystem of Terra. Following the initial reports regarding a potential congressional hearing as well as an investigation to be done on the behalf of the financial crimes unit (a.k.a. Grim Reapers), the crypto platform is presently being targeted by the national tax agency.
As per a report that Never news has published, the national tax agency of South Korea has penalized Terraform Labs as well as the co-founder thereof with a fine of nearly $78M (100B won) over the tax evasion. The report brought to the front that an unhappy expression was shown by Kwon regarding the crypto taxation across the country since the recent December and he attempted to liquidate the domestic activities of Terra just before the happening of the notorious LUNA collapse.
The reports disclose that the Terraform Labs initially came under the tax authorities’ radar in 2021’s June due to the suspicion of having evaded income and corporate tax. The investigation over the Terraform as well as diverse subdivisions thereof pointed out that Singapore and the Virgin Islands were the places where the firm got registered. Even though the nature of both of the subdivisions was foreign-based, South Korea itself counted to be the area for the venue’s management.
As the corporate tax-related act under the Korean constitution puts it, the region where the company is being managed should be the place for its registration and tax purposes instead of the others. The tax authorities got alerted following a shift of LUNA by Terraform Labs from Terra Singapore to LFG (Luna Foundation Guard) to escape from the taxations or to prepare for the damages associated with anchor protocol.
A few months back in October, Terra subsidiaries that operate in the Virgin Islands were ordered to recompense up to 4.66B worth in won (nearly $3.6M) in the form of income tax along with up to 44.7B worth in won (approximately $34.7M) in the form of corporate tax.
The policymakers and law enforcement organizations in South Korea have become stricter in the case of Do Kwon as well as the associates thereof following the crash of LUNA. A Yeouido-based special unit for the investigation of financial crimes, Grim Reapers, was called back to work after a gap of 2.5 years to peel out the matter leaf-after-leaf.