The Terraform Labs controversy continues to gain attention throughout the crypto industry, and the South Korean authorities are taking steps to unravel the alleged fraud case.
On July 20, detectives from the Seoul Southern District Prosecutors Office raided a number of cryptocurrency exchanges in the area, including Upbit.
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How did the raids unfold?
Terraform’s digital currencies, TerraUSD and LUNA, collapsed under the weight of significant losses for investors after the raids seized transaction records and other materials.
Do Kwon is the founder of Terraform Labs, the business that is the subject of the inquiry. Staff members of Terraform Labs were interrogated during the investigation. Several cryptocurrency wallets were sent $80 million a month from Do Kwon’s personal account and the protocol’s treasury by Do Kwon.
As a result of Do Kwon’s knowledge of the impending disaster, the SEC believes he began stealing assets and money from the company’s treasury.
What led to this?
🧵👇 Do Kwon and Terraform Labs defrauded the retail public of hundreds of millions of dollars *that they currently still have*. It came out of the pockets of LUNA & UST holders and went into their wallets.
Here's why you should be mad, and here's what you can do about it. 🧵👇
— FatMan (@FatManTerra) May 17, 2022
An anonymous crypto whistleblower suspected Kwon of committing a significant fraud in late May using Terraform Labs’ Mirror Protocol. Following a complex operation involving Seoul-based “blockchain consultancy firm K,” the company was charged with money laundering through a South Korean front company.
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