Terraform Labs investigation prompts South Korean crypto exchange raids
As the crisis concerning Terraform Labs continues to get widespread attention in the cryptocurrency industry, South Korean officials continue their efforts to unravel the probable fraud case.
Yonhap News Agency reported on July 20 that a team of detectives from the Seoul Southern District Prosecutors Office searched several local cryptocurrency exchanges, including Upbit.
Specifically, the searches involved the seizure of transaction records and other evidence deemed helpful for the inquiry into the events that led to the downfall of Terraform’s digital currencies, TerraUSD (USTC) and LUNA, and the resulting substantial investor losses.
The storyline of Terraform thickens
In late May, the CEO of Terraform Labs, Do Kwon, was charged by a crypto whistleblower with perpetrating an enormous scam utilising the company’s Mirror Protocol. Shortly afterwards, the corporation was accused of money laundering via a South Korean shell company as part of a complex conspiracy involving a Seoul-based “blockchain consultancy firm K.”
Simultaneously, South Korean police initiated an inquiry into one of the company’s workers for suspected Bitcoin (BTC) theft in May 2021. However, no connection was established between the suspect and Do Kwon.
Moreover, new research conducted by blockchain security firm Uppsala Security and CoinDesk Korea supports the accusations of those who think the Terra ecosystem collapse may have resulted from an inside job.
As part of its probe, the Joint Financial and Securities Crime Investigation Team of the Seoul Southern District Prosecutor Office put a travel restriction on Mr A, one of Terra’s significant designers, Finbold reported in late June.
Meanwhile, South Korea’s Minister of Justice Han Dong-hoon met with U.S. authorities at the U.S. Attorney’s Office for the Southern District of New York to discuss how the two nations may pursue crypto-related crimes, such as the Terraform Labs case.