Korean Law Enforcement Questions Terraform Labs Staff

2022/06/06By: L, Laura

The company behind the former stablecoin may still be in legal trouble as authorities subpoena Terraform Labs employees.

 

Even though Terra V2 is up and running, the consequences of Terra V1 are still unfolding.

 

According to JBTC, a South Korean television network, the Seoul Southern District Prosecutors’ Office’s financial and securities crime investigation team summoned Terraform Labs employees involved in the blockchain’s initial development. The report quotes employees being against the launch of UST based on possible “fluctuations in value.”

 

Authorities are also looking into possible price manipulation and into whether LUNA went through a proper listing review process when applying to exchanges. Investors that were hit by the crash filed further complaints against Terra CEO Do Kwon. In total, JBTC quotes 76 investors having filed a complaint.

 

The investigation comes at an inopportune time for Terra.

 

The blockchain has just launched its V2 version, which is a hard fork of the renamed Terra Classic. The chain is supposed to be community-owned, with most of the token allocation going to former Luna Classic and UST holders.

 

However, the start for LUNA has not been the best. After a brief spike, the token dumped 75%, although it has since rallied in anticipation of another airdrop for Binance users. Still, most market participants seem to be wary of getting involved with Terra V2 too quickly.

 

That, however, does not stop Do Kwon from reportedly thinking about a re-launch of a decentralized stablecoin on Terra V2. Even though the failed algorithmic stablecoin from Terra Classic will not migrate, Terra’s outspoken CEO seems to be thinking about how to get the party started again.

 

It remains to be seen if the market will actually appreciate such a move, and initial reactions on Crypto Twitter have been less than enthusiastic.

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