In a bid to unravel the circumstances leading to the collapse of the digital currency Luna, South Korean prosecutors yesterday raided some local crypto exchanges. According to the police’s spokesperson, “more than 15 cryptocurrency exchanges and offices that deal in crypto-related transactions were raided for possible information that may give insights on Luna probe. The latest operation by the South Korean authority aims to determine Do Kwon’s involvement in the Terra fallout.” The raid may not be unconnected to the fraud accusations levelled against the co-founders of Terraform Labs by the company’s investors. Terraform Labs is a blockchain platform.
According to local media, the Seoul Southern District Prosecutors Office raided exchanges like Bithumb, Upbit, Coinone, and four others. The prosecutors began seizing transaction records and other materials from the crypto companies at around 5:30 pm. Aside from crypto exchanges, business outlets involving in crypto-related deals were amsl raided.
Before the South Korean prosecutors swung into action, Terraform Labs investors had accused the Korean developers Do Kwon and Daniel Shin of fraud running into millions of dollars. Following the collapse of stablecoin TerraUSD in May, Luna’s price plummeted to almost zero, a situation which affected the Luna exchange rate against the dollar. As a result of the price depreciation, investors lost their hard-earned money; hence the accusation. The raid is meant to determine if the allegation was an intentional move done by Terraform Labs.
In a face-saving move, Terraform Labs had to place some of its employees on a no-fly list last month. Recently, 300+ NFTs Stolen, $400k in Ethereum taken in Premint hack. Experts believe that if the Premint hack and the Luna probe fizzle out without a reasonable conclusion, many investors will be discouraged from venturing into crypto-related investments.