South Korea Launches Investigations About Luna Crypto Crash

South Korean police and prosecutors are looking into Do Kwon’s Terraform Labs following his tokens’ $40 billion implosions, which shook the global cryptocurrency market.

The Seoul Metropolitan Police Agency investigated allegations; according to them, a Terraform Labs employee stole an undisclosed amount of the company’s bitcoin holdings.

The investigation follows the launch of an investigation by the Seoul Southern District Prosecutors’ Office in late May into two collective complaints filed on behalf of 81 investors; they alleged that “Terraform founders and the company deceived investors with their flawed algorithmic coins,” according to the documents. Following the spectacular collapse of terraUSD, a stablecoin, and its cousin luna, designed by the 30-year-old South Korean, financial regulators worldwide are trying to tighten regulation of the crypto sector.

A special financial crimes team formed by new justice minister Han Dong-hoon is investigating the disaster. According to South Korea’s Financial Services Commission, around 280,000 South Koreans own 70 billion luna coins. Investors could deposit their terraUSD coins for a 20% return. South Korean officials are also contemplating an on-site assessment of Shin’s Chai digital payment system, which was previously tied to the terraUSD/luna network.

South Korea was an early adoption of cryptocurrencies; the Korean won ranked third after the dollar and yen in terms of bitcoin trading. The won accounts for around 3% of global trade.

There have been more than a dozen measures in South Korea’s parliament to tighten investor safeguards; they do this by making cryptocurrency exchanges liable for any associated offenses such as unfair trading and financial scams. Almost two weeks after the new luna currencies were live, their value plunged by more than 80% to new lows.