It’s been a month since Do Kwon’s platform Terra collapsed. And billions of investors’ money just vanished. Now international regulators launched their investigations on Terra.
The biggest market crypto crash, suicides in South Korea, and thousands of downfallen investors around the globe.
That’s the Terra platform collapse consequences.
Everything started with Terra UST stablecoin collapse and LUNA vanishing. Just in a few days, these tokens have lost around $50 billion of market capitalization.
The new Terra chain was about to save investors money, but still, it isn’t showing any performance, falling from $19 to $3 in two weeks of its existence.
Now the South Korean and the US regulators started investigations against Terra company and its founder Do Kwon.
Here is what to know so far.
Terra investigations to show money laundering probe
South Korean media Naver reports that the United States Securities and Exchange Commission (SEC) conducted a ‘remote video survey of some of Terra’s key designers and focused on inquiring about Terra’s poor design structure’.
“The designers earlier predicted the collapse of Terra and Luna. They pointed out the danger to CEO Do Kwon several times,” it says.
Reportedly, the SEC found that about 100 billion won of company funds were embezzled every month. The regulator allegedly found the funds being sent out for operating expenses a few months before the Terra collapse.
This could point out a Kwon’s plan to launder the money, the report added. The US regulatory body also got the internal evidence on the money transfer to ‘dozens of cryptocurrency wallets’.
However, there is no evidence Do Kwon was receiving any of the money from his personal accounts.
South Korean law enforcement agencies are also investigating Terraform Labs, and Financial Times reports. It said that the Seoul Metropolitan Police Agency has launched a probe into allegations of embezzlement of an undisclosed amount of Terra’s Bitcoin holdings.
Another Terra co-founder Daniel Shin denied allegations of fraud, responding that there was ‘no intention of deception’ and that the company wanted to innovate the payment settlement system using blockchain technology.
Arrested and fled employees
There is also a report about a Terra employee who stole Bitcoin worth around $2,39 million. Seoul Metropolitan Police Agency arrested him last Tuesday, June 7.
We still don’t have proof of Do Kwon or any other Terra managers to take part in the fraud.
The suspected employee could steal the Bitcoin reserves of the Luna Foundation Guard (LFG), which were stored to support the stability of UST stablecoin.
Right after the incident, the LFG spokesperson announced that it has sold most of its BTC holdings with only 300 tokens remaining in the reserves. That’s around $9 million at the time of writing.
A Terra insider FatMan said that Do Kwon ‘had silently been cashing out hundreds of millions into foreign bank accounts&Bitcoin wallets’.
Earlier The Block sources reported that the company lawyers resigned right after the UST/LUNA crash. The third-party expert should have run legal matters in Terra during this period.
