The South Korean government continues to investigate Terraform Labs, the company behind the Terra network, as well as Luna Classic (LUNC), formerly known as Terra (Luna) and TerraUSD (UST) tokens, reportedly through subpoenas to employees.
South Korean authorities have reportedly summoned all Terraform Labs employees as part of a comprehensive investigation into the collapse of local news agencies JTBC UST and LUNC report Saturday.
According to the report, the investigation was conducted by the Financial Securities Crime Joint Investigation Team of the Seoul Southern District Prosecutor’s Office. Authorities are investigating the case to check for signs of deliberate price manipulation and whether the token passed the proper listing process.
Investigators also reportedly claim that the mechanics of the Terra token are flawed in the first place because stablecoin UST is not tied to a stable collateral or profit model. “At a certain point in time, there is no other way but to collapse because it cannot handle interest payments and fluctuations in value,” the authorities reportedly said.
As previously reported, Terra investors file class-action lawsuit In mid-May, Terraform Labs CEO Do Kwon and co-founder Shin Hyun-seun requested records of user accounts, marketing materials and UST-related communications.Investors reportedly lost up to $44 million in deposits after LUNC plummets 99% and UST loses 1:1 peg value against the US dollar.
According to some reports, Terraform Labs Dissolution of its Korean branch In the days leading up to the collapse of LUNC and UST, there was speculation that Kwon had closed local units to evade taxes.South Korean state tax authority finally penalizes Terraform Labs and its co-founders $78 million in tax evasion fines.
The news came on May 28 when Terraform Labs relaunched Terra’s new chain, Terra 2.0, Aiming to restore the collapsed Terra ecosystem. Major cryptocurrency exchanges including Binance and FTX say they are Work closely with the Terra team Support for upcoming airdrops to help affected users. The new LUNA token plummeted 70% shortly after its launch, and many investors turned to Terra 2.0.