Regulation News

Korean Prosecutors launch Investigation in TerraUSD Crash – Employees Of Terra Lab To Be Summoned

Written by: Qadir AK

Written by right arrow

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

  • author facebook
  • author twitter
  • linkedin

May 30, 2022

news-image

The dramatical collapse of algorithmic stablecoin UST earlier this month, destroyed more than $40 billion of value for investors. UST’s price fell below 10 cents which was always supposed to be at $1, and still hasn’t recovered. 

whereas the respective UST is now trading at around 3 cents , and the UST’s sister token named Luna is almost losing its entire value trading at a fraction of a cent, a recent report reveals. In response to this, Prosecutors in South Korea have called all employees of Terraform Labs to investigate the collapse of TerraUSD.

Reacting to this implosion the Terraform Labs have abandoned the UST as part of the new blockchain and renamed the original Luna tokens as “luna classic” (LUNC). And also, launched the new Terra blockchain, called Terra 2.0 over last week.

In response to this, Prosecutors in South Korea have called all employees of Terraform Labs to investigate the collapse of TerraUSD.

Thus, the  South Korean agencies are investigating the probability of the historic collapse of the stablecoin known by its UST ticker, according to a report from local television network JTBC on Saturday. The crypto exchnages involvement during the fall are also under consideration. 

JTBC further reports that, Specifically, the Seoul Southern District Prosecutor’s Office’s joint financial and securities crime investigation team has summoned Terraform employees.

An unknown employee involved in the initial development of the Terra blockchain in 2019 has been already testified by the officials. The employee during the investigation told officials that there were concerns about UST’s design from some within Terraform Labs.  

The prosecutors are deeply looking at the whole matter, including the CEO Do Kwon’s UST design flows to find out the negligence made in its design. Prosecutors are also repeatedly looking around as the local cryptocurrency exchnages went through proper listing review before listing UST or luna. 

Further, Korea’s financial regulators (FSC) – the Financial Services Commission (FSS) have reportedly launched emergency inspections into local crypto exchnages to enhance investor protection, earlier this month. 

Show More

Was this writing helpful?

dislikeimage No myImage Yes

Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

Related Articles

Back to top button