On Wednesday, a team of South Korean investigators raided the offices of seven domestic crypto exchanges as part of an ongoing probe into the fall of Terraform Labs’ dual tokens LUNA and TerraUSD (UST) according to a report in a local media outlet.
Korean Prosecutors Raid Seven Exchanges Linked To Terra Meltdown
South Korean authorities have intensified probes into the Terra crisis.
The Seoul Southern District Prosecutors Office started seizing transaction records and other documents from Upbit, Bithumb, Coinone, and four other local exchanges around 5:30 p.m Korea Standard time, local media outlet Yonhap first reported Wednesday.
These materials will reportedly help confirm whether Terraform Labs co-founder Do Kwon intentionally caused the fall of UST and LUNA. The investigation team also intends to question witnesses to determine the scope of the damages suffered by investors.
The investigators also raided eight other places, including the homes and offices of the individuals involved in the case. South Korean police launched a full-scale investigation into Terraform Labs in May following allegations of embezzlement and tax fraud.
Terra’s Stunning Fall From Grace
The Terra ecosystem imploded spectacularly in May after the UST algorithmic stablecoin, intended to maintain a 1:1 parity with the US dollar, slid painfully below the greenback. At the same time, its sister token LUNA (once a top ten crypto asset) crashed to virtually zero. The implosion of these dual tokens vaporized tens of billions of dollars in value.
Unwilling to give up despite losing nearly all of his fortune, Do Kwon proposed the launch of Terra 2.0, a project that entailed dropping the algorithmic stablecoin entirely from the relaunched network.
Nonetheless, the prices are still in the doldrums despite the revival plans. TerraUSD Classic (USTC) is valued at $0.04, far below its intended $1.00 price peg. As of this writing, Terra Luna Classic (LUNC) is valued at $0.0001067. The revived Terra (LUNA) is priced at $2.07 — down considerably from a late May peak of $19.34.
In addition to the investigations discussed above, Kwon and Terraform Labs also deal with a class-action lawsuit initiated in the U.S. District Court in Northern California. Lawmakers in South Korea have also summoned Kwon to speak at a parliamentary hearing concerning the UST crash.
Other reports suggest that U.S. and South Korea officials met up early last month to share data regarding the Terra meltdown. Today’s news signifies that the massive legal turbulence following the collapse of UST and LUNA is far from over.