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May 22, 2022

Do Kwon Being Sued By Investors for Fraud and $78 Million Tax Evasion

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.

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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.