The South Korean government continues to investigate Terraform Labs. South Korean authorities have reportedly summoned all employees at Terraform Labs as part of a full-scale investigation of the collapse of UST and LUNC.
According to reports, the probe is conducted by the joint financial and securities crime investigation team of the Seoul Southern District Prosecutors Office. The authorities are looking into the case to check for signs of intentional price manipulation and whether the tokens went through proper listing procedures.
The investigators also reportedly alleged that Terra tokens’ mechanism was faulty in the first place as UST is not pegged to a stable collateral or profit model. “At a certain point in time, there is no other way but to collapse because it cannot handle interest payments and fluctuations in value,” the authorities reportedly said.
Luna investors filed a class action suit against Terraform Labs CEO Do Kwon and co-founder Shin Hyun-seun in mid-May, demanding a record of user accounts, marketing materials and UST-related communications. The investors reportedly lost up to $44 million worth of deposited funds after LUNC tanked 99% and UST lost its 1:1 peg value to the United States dollar.
According to some reports, Terraform Labs dissolved its South Korean branch days before the Luna and UST collapse, with some speculating that Kwon closed the local division to evade taxes.
