Korean Prosecutors Raid Exchanges After Terra’s Probe

Korean prosecutors raid exchanges after the Terra probe as a part of the ongoing investigation into the Terraform activities so let’s have a closer look at our latest cryptocurrency news today.

The offices of Upbit and other crypto exchanges were raided on Wednesday by a team of investigators that are probing a fraud case in the connection with the crash of the Terraform labs tokens TerraUsD and LUNA as per the reports from Yonhap News Agency. The Seoul Southern District Prosecutors Office started seizing transaction records as well as other materials from Coinone, bithumb, and Upbit but also four other exchanges around 5:30 p.m local time.

The Korean prosecutors are raiding exchanges after the Terra UST stablecoin collapse. UST collapsed after losing the intended peg to the US dollar in May along with the LUNA token which resulted in tens of billions of investors’ wealth being drained off the market. The implosion of the TErra ecosystem attracted quite the regulatory scrutiny across the world.

The US SEC is looking into a possible violation of the federal investor protection rules in relation to the UST marketing practices while the authoriteis in South Korea launched a seaprate investigation to determine whether the price manipulation and other issues could have been behind the UST crash. A class-action lawsuit brought against Kwon and Terraform labs was also launched in the US District Court in Northern California.

As for Kwon, Terraform Labs’s co-founder a month ago said that he was devasted by the crash of the project. He claimed that he lost about all of his net worth in the Terra crash while denying claims that the project was a fraud.

As earlier reported, Without sharing any names, the South Korean media agency reported that the Seoul Southern District Prosecutors’ Office Joint Financial and Securities Crime Investigation Team as the main South Korean authorities imposed a departure ban on a key Terra designer from leaving the country. The team was investigating Terraform Labs and its employees and the founding members after the collapse of TerraUSD and the LUNA token.

The key member allegedly told the media outlet that the company’s CEO Do Kwon revealed to them about making money to buy an island and the allegations of Kwon secretly selling the crypto to institutions in a bid to raise bigger amounts of funds were made by that person. The prosecution is investigating if the money funds were used for market price adjustments which artificially inflates the token price.