This week was a busy one for South Korean crypto exchange firms as they received warning notices from the police. The notices asked them to freeze assets linked with Terraform Labs’ non-profit group Luna Foundation Guard (LFG), over allegations of embezzlement following the UST/LUNA meltdown earlier this month.
The police claim that LFG might have embezzled the company’s funds while trying to rescue the network from collapse. It is estimated that Terra, the company which created algorithmic stablecoin UST and LUNA token, had lost a whopping $30 billion due to the collapse. If this is true, it would explain why the Foundation has been so tight-lipped about the whole ordeal.
Meanwhile, some of South Korea’s top investors have taken legal action against Terra’s founder and CEO Do Kwon. Reports suggest that more than 270,000 domestic investors have been burned by the project’s sudden implosion.
In fact, a Korean group of investors called “Victims of Luna, UST coins”, are preparing a class action lawsuit demanding the seizure of Kwon’s assets and property. The group alleges that the Terraform Labs’ founder is responsible for the demise of Terra and the subsequent crash of the network’s token and stablecoin, which has caused them significant financial losses.
This legal action has prompted the Korean authorities to revive the “Yeouido Grim Reaper” – a joint investigation team between South Korea’s financial and securities crime units.
The Yeouido Grim Reaper team – named after the Yeouido financial district of Seoul – will investigate the circumstances surrounding the Terraform Labs network crash, and if any criminal wrongdoing is found, those responsible will be prosecuted to the fullest extent of the law.
The unit, known for its accuracy and clinical approach, was disbanded in 2020 but has been resurrected in response to the current situation.
BREAKING: 🇰🇷 South Korea has revived the 'Yeouido Grim Reaper' unit after two years of inactivity to investigate the $LUNA case.
— Watcher.Guru (@WatcherGuru) May 18, 2022
LFG’s asset freezing news was first broken by KBS, the country’s national broadcaster.
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