Amid the increasing investigation against TerraForm Labs, the South Korean investigation agency imposed a ban on Terra’s main designers from leaving the country.
Terraform Labs is a developer team, which was founded by Do Kwon. In 2019, Terraform Labs launched its Terra blockchain with two native tokens, UST stable coin & Luna. In the last month, the Terra ecosystem collapsed badly because of extreme bear sentiment & bad business model of its algorithmic stable coin. To figure out the main reason behind the collapse and responsible players, the South Korean government is doing investigation against TerraForm Labs and its associated dominant players.
On 20 June, South Korean news media outlet JBTC reported that the Seoul Southern District Prosecutor Office’s Joint Financial and Securities Crime Investigation Team issued an order to impose a departure ban on Mr. A. The departure ban order was part of the investigation against the Terra project team, so that investigation remains fully transparent without any delay.
Earlier this, as per report, Mr. A shared some important information with the media outlet earlier that he talked to Terra founder Do Kwon, the Terraform Labs CEO, who allegedly told him that he had “made enough money to buy an island.” Mr. A also said to the media reporters that Terra founder secretly sold digital assets to some institutions, to raise huge amounts of money.
Now the investigation team will find out whether the raised funds were used to pump the price of Luna coin artificially or not.
Furthermore, the report also claimed that the investigation’s activities are also raising some possibilities of launching a forced investigation that will include search and seizure orders and also summoning the main officers.
Currently available reports on behalf of the investigation found that the collapse of the Terra ecosystem happened because of insider activity because a wallet identified as an “attacker”, which generated influential transactions in favor of Terra collapse, was in control of Terraform labs.