South Korean authorities keep launching investigations on Terraform Labs, the company behind the Terra Network, as they reportedly summoned all employees, according to local media outlets.
Agency JTBC is reporting that this is part of a full-scale investigation launched by the South Korean government and the financial and securities crime investigation team of the Seoul Southern District Prosecutors Office.
“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 commented on the mechanism used by Terraform Labs for its token regarding profit model. In addition, the authorities reportedly summoned an employee known to have been involved in the initial development of Terra LUNA in 2019.
South Korean Government's Inquiries
A report recently revealed that South Korea’s National Tax Service (NTS) had fined Terraform Labs and Do Kwon 100 billion won ($78 million) for the alleged tax evasion.
Do Kwon has been unhappy with the domestic taxation system since December last year. It was confirmed days before the LUNA crash that he was trying to dissolve a domestic corporation and relocate overseas, which raised suspicions that he was evading taxes. According to the NTS, Do Kwon, Shin Hyun-seong, the Chairman of the Board of Ticket Monster, Han Chang-joon, the CEO of Chai Corporation, and Terraform Labs must pay 100 billion won in taxes.
South Korea’s financial authorities have begun inspecting cryptocurrency exchanges. Additionally, investors have suffered massive losses after the price of LUNA, TerraUSD’s sister coin, plummeted. Local cryptocurrency exchange operators were asked by the Financial Services Commission and the Financial Supervisory Service (FSS) for information on transactions related to TerraUSD and LUNA, including volumes of trading, closing prices and investor participation.
Terra LUNA 2.0 Launch
Terra launched LUNA 2.0 with an aim to recoup losses following the LUNA fiasco. However, the crypto asset took a major hit shortly after the launch.
