South Korean authorities banned Terra’s main developers from leaving the country

According to the preliminary results of the investigation, the collapse of the ecosystem may have been caused by the company itself

20.06.2022 - 14:55

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What’s new? South Korean prosecutors have launched an investigation into Terraform Labs (TFL) following the collapse of the TerraUSD (UST) stablecoin and the Terra native token (LUNA). Law enforcement officials issued an order banning the project's chief developers from leaving the country. This is reported by the local publication JBTC.

Information on JBTC website

How did the events develop? According to local media reports, the Joint Financial and Securities Crimes Investigation Unit of the Seoul Southern District Prosecutor's Office imposed a travel ban on a certain citizen A. According to him, the CEO of TFL Do Kwon was illegally selling cryptocurrency to companies in order to make large profits. The prosecutor's office wants to know if the funds raised in this way were used to artificially inflate the price of LUNA.

Preliminary conclusions from the prosecutor's office. The investigation found that Terra's collapse may have been the result of the company's own actions, since the wallet whose transaction was followed by the collapse of the ecosystem was actually maintained by TFL. The company is also accused of laundering $4,8 million through a South Korean shell firm that allegedly provided blockchain consulting services.

On June 10, the US Securities and Exchange Commission (SEC) initiated an investigation into the collapse of UST. The regulator will check whether the stablecoin's marketing strategy violated federal investor protection laws.

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