Terraform Labs is currently under multiple investigations from the South Korean authorities.
The latest investigation circles around the alleged embezzlement of Bitcoin from the company’s treasury. According to reports the Seoul Metropolitan Police Agency received an intelligence tip last month informing them of possible embezzlement of BTC by one of the employees of the firm.
The police specified that the investigation into the alleged embezzlement of BTC from the company’s treasury had no direct connection with the co-founder Do Kwon. Authorities managed to freeze the stolen funds with the help of a crypto exchange until the investigation is complete.
The Luna Foundation Guard which was set up by the company and held over $3 billion in Bitcoin reserves, became the focus of interest in the aftermath of its fall. The BTC fund was used to help balance the algorithmic stablecoin TerraUSD Classic. The firm claimed all its BTC reserves were used in a vain attempt to stabilize USTC.
The fall of the Terra ecosystem didn’t just invite legal troubles for the creators of the project, it has also forced regulators around the globe to rethink their crypto regulatory strategy. Korea formed a new crypto oversight committee, while Japan passed new regulations permitting only trust companies and banks to issue stablecoin.
