South Korean prosecutors behind the Terraform Labs investigation have reportedly searched and seized 15 businesses, including seven crypto exchanges.
According to a report published by News1 Korea on Wednesday, the Joint Financial and Securities Crimes Investigation Team of the Seoul Southern District Prosecutor’s Office raided the offices of Upbit, Bithumb, Coinone, Korbit and Copax as well as other companies linked to the Terra collapse. Authorities reportedly obtained data related to TerraUSD (formerly UST) and Terra (LUNA) – now Luna Classic (LUC) – transactions, in which around 200,000 Korean investors suffered losses following the sharp devaluation of token prices and the subsequent collapse in May.
Some of the victims of Terra’s collapse and UST’s de-anchoring have reportedly appointed local law firm LKB & Partners to represent them in a lawsuit against Terraform Labs and its co-founder Do Kwon, alleging the company committed fraud. More than 100 people who filed complaints with the prosecutor’s office allegedly suffered losses totaling about $8 million.
“Defendants failed to properly inform of design errors and algorithm flaws in the design and issuance of Luna and Terra coins in a collusion to attract investors,” a spokesperson said. LKB & Partners.
Following the collapse of UST and LUNA, South Korea’s national tax agency reportedly hit Terraform Labs and Kwon with a penalty of $78 million related to tax evasion. The country’s lawmakers have also called on Kwon to speak at a parliamentary hearing regarding the events around the collapse of Terra and the depegging of UST.
Although based in South Korea, Terraform Labs and the events surrounding its token collapse have had vast implications for the crypto space. In the United States, investors affected by the UST and LUNA fallout have hinted legal action against Stablegains yield generating app for allegedly losing $44 million in deposited funds.