Author: Coinposters

According to reports, officials in South Korea have summoned all of Terraform Labs’ personnel in an effort to find out what caused Terra’s ecosystem to collapse earlier this month.

It has been reported that all Terraform Labs personnel have been subpoenaed by the combined financial and securities criminal investigation section of the Seoul Southern District Prosecution’s Office.

The report said that one of Terra’s workers had previously testified that there were internal worries about Terra’s viability. The unidentified employee engaged in building the coins in 2019 cautioned Terra creator Do Kwon that the tokens may collapse at any point. There were warnings from an employee, but CEO opted to disregard them, and pushed token launch, he stated.

Additionally, despite the failure of a company-wide pilot program, these tokens were nonetheless introduced, according to the employee.

Authorities in South Korea are conducting an inquiry to see whether LUNC or UST prices were manipulated intentionally. The authorities are also investigating whether the tokens were listed on domestic markets in accordance with appropriate procedures.

Since UST was not tied to any secure collateral and had no sustainable business model, investigators are worried that Terra’s tokenomics were incorrect.

CEO of Circle Jeremy Allaire told Protocol after the collapse that Terra was a “house of cards” that was doomed to fail, he said.

The Financial Services Commission in Korea estimates that 280,000 investors have lost money as a result of Terra’s demise. Do Kwon and Terra co-founder Shin Hyun-Seung have been named in a class-action lawsuit brought by some of the impacted investors.

Additionally, legislators hope that Do Kwon would appear before South Korea’s parliament to discuss the disaster. Financial institutions in Terra have been ordered to freeze the assets of the non-profit Luna Foundation Guard as a result of a request from the police.

As a result of the Terra debacle, officials are scrambling to increase their monitoring of the country’s crypto exchanges.

Luna 2.0 is Do Kwon’s newest effort to resurrect the Terra biosphere. Shortly after its May 28 introduction, the new token suffered an almost 80% decline in value.

Terra’s Do Kwon has been sued by the impacted investors in both criminal and civil cases. The outraged investors are presently seeking fraud charges and an order to confiscate Kwon’s assets, represented by the law firm RKB & Partners.

As the Terra tale unfolds, the project’s creators have come under fire from the crypto community. South Korean investors are actively pursuing legal action against Terra’s co-founders in the wake of the company’s disastrous collapse.

Another group of South Korean investors, dubbed “Victims of Luna, UST coins,” has swelled to almost 1,500 members. This vast group of investors is also reportedly preparing to sue Kwon and Terra’s other co-founder, Shin Hyun-Seong, for unlawful fundraising.

Because Terra’s legal staff unexpectedly terminated relations with the firm throughout the disaster, these new developments may prove inconvenient for the co-founders. While the majority of the crypto community criticized the legal team for quitting, some praised them.

Bitcoin supporter Stacy Herbert stated Terraform Labs’ legal staff resigned in response to the lawsuit. There’s nothing they can do when the CEO refuses to stop emailing whales with ridiculous’rescue’ schemes and then tweeting about them as if they’re done—which they aren’t. If you adore disasters, stay away from shitcoins.

While dealing with other legal issues, Terra’s CEO is presently facing tax evasion allegations from South Korea’s tax commission, for which the business has been ordered to pay a fine of up to $78 million.

While Terraform Labs subsidiaries were incorporated in Singapore and the Virgin Islands, investigations by South Korea’s National Tax Service (NTS) discovered that they were administered in the nation, namely in Seoul and Busan, resulting in tax fraud charges.

Before catastrophe struck, Kwon resolved to disband the company’s headquarters in South Korea and relocate its activities overseas to avoid paying taxes. He has, however, refuted the allegations, claiming that Terra owes no taxes to the government.

Kwon disbanded the Terraform Labs Korea firm just days before the ecosystem’s catastrophic collapse, according to new court filings. The project’s management unanimously resolved to disband its Seoul and Busan headquarters on May 4 and 6, respectively, during a general shareholder meeting on April 30.

Around the same time, UST launched its depeg, triggering a chain reaction that wiped out almost $26 billion from the stablecoin market, declared LUNA useless, and left investors with enormous unrealized losses. The link between these two occurrences sparked discussion regarding the Terra collapse.