Without divulging any names, a South Korean media agency reported that the Seoul Southern District Prosecutor’s Office’s Joint Financial and Securities Crime Investigation Team has banned a key Terra designer from leaving the country. The team has been investigating Terraform Labs, its employees, and founding members after the stunning collapse of TerraUSD (UST) and its sister token LUNC (Luna Classic).
Inside Job
The anonymous “key member” had allegedly told the media outlet that the company’s CEO, Do Kwon, revealed to them about making enough money to buy an island. Allegations of Kwon secretly selling the cryptocurrency to institutions in a bid to raise large amounts of funds were also made by that person.
The prosecution is now investigating if the money funds were used for ‘market price adjustment’ that artificially inflates the token price.
The move to prevent the departure of the person may mark the start of a full-scale investigation as searches and seizures. In a statement, an official from the Ministry of Justice said,
“It is impossible to confirm whether the departure ban is related to the confidentiality of the investigation.”
According to research uncovered by blockchain security firm Uppsala Security, the collapse that resulted in billions of losses of dollars could have been an inside job. It said the potential attacker’s wallet responsible for the events that transpired last month might have been associated with Terraform or any of its related entities.
South Korean prosecutors debunked the previous rumors floating in the space that the attackers who hit Terra were Wall Street whales. Rather, Terraform’s internal wallets were being investigated.
Terra’s implosion has attracted the ire of regulators across the world. The US Securities and Exchange Commission (SEC) recently launched another investigation into Terraform Labs to determine if the tokens in question were, in fact, unregistered securities.
South Korean authorities, on the other hand, were forced to form a committee dedicated solely to strict regulation and supervision of the crypto industry until the approval of the Digital Assets Framework Act and the rolling out of a government agency to avoid another Terra-style meltdown.
The latest development emerges a day after Do Kwon, the Luna Foundation Guard, and other Terra-developing entities were slapped with a lawsuit by Illinois resident Nick Patterson for misleading investors.
New LUNA Old Story
Terra’s revival plans may have delivered a new token – LUNA – but any meaningful possibilities of uptrend appeared to have been slaughtered amidst the ongoing bloodbath. Its price may repeat the same failure and no amount of Kwon’s assuring words seem to help.
Experts have expressed significant skepticism over the 2.0’s prospects. For instance, Mati Greenspan, the CEO of crypto research and investment firm Quantum Economics, stated,
“Luna 2 was never meant to survive, it was simply a mechanism for some who were heavily invested to recoup some of their losses at the expense of new money coming in from the hype. I don’t see any reason for the price to go up ever.”
