New York and South Korean authorities seek to jointly resolve the fraud caused by Do Kwon and his partners against their investors. South Korea raided local offices and exchanges, where they collected evidence about the disappearance of Terra and LUNA resources. Authorities continue to collect evidence as Do Kwon is banned from leaving South Korea.
Amid the investigations into the collapse of Terra (LUNA), authorities from the Seoul Southern District Public Prosecutor’s Office in South Korea raided the headquarters of Terraform Labs, and even local exchanges (although it is unknown which ones), as part of obtaining evidence.
South Korean judicial authorities raided properties and offices, to address complaints from defrauded TerraUSD investors, who filed complaints against Terraform Labs CEO Do Kwon and company co-founder Daniel Shin, accused of fraud for the loss of billions of dollars, after the fall of both stablecoins.
About the Raids
According to the Korean agency Yonhap, the raids involved the seizure of transaction records, “valuable material” (unknown) that helped determine the circumstances that led to the disappearance of USTC and LUNA, and even clues about the loss of resources.
In July, analysts at Chainalysis warned who might be behind the collapse of the Terra ecosystem, which cost the entire industry around $60 billion. According to insiders, it all started on the night of May 7, when Terraform Labs, as part of a planned operation, withdrew 150 million UST from the Curve-based 3pool liquidity pool. Such a large and unique operation, according to analysts, increased the volatility of the pool.
Just thirteen minutes later, a major trader spotted this loophole and swapped 85 million UST for USDC to add to the volatility. Over the next hour, another trader converted a total of 100 million UST into USDC in four staggered transactions, adding to the volatility.
Role of the Korean Ministry of Justice
Meanwhile, South Korea’s Justice Minister Han Dong-hoon met with US officials in New York (Prosecutor’s Office) to discuss possible techniques or methods for South Korea and the United States to collaborate to investigate crimes related to cryptocurrencies.
At the end of June, the Prosecutor’s Office of the South District of Seoul (Capital of South Korea), in charge of investigating the Terra case, imposed a ban on several of the main Terra Labs developers leaving the country.
As reported by the local media JTBC, the Joint Investigation Team of Financial and Securities Crimes of the Prosecutor’s Office, had prohibited the departure of Mr. A, one of the main developers of Terra, who has become a key player in the investigation, due to his interviews.
Furthermore, Blockchain security firm Uppsala Security and CoinDesk Korea jointly conducted an investigation into the flow of funds and released investigation results indicating that illicit activity may have occurred and determined that Terraform Labs and Luna Foundation Guard (LFG) could have manipulated prices using billions in stablecoins, according to a report.
By Audy Castaneda
