South Korean prosecutors raided the home of Terraform Lab co-founder Daniel Shin, deepening a übung into allegations associated with illegal activity behind the collapse associated with stablecoin TerraUSD.
A series of raids on crypto-exchanges and workplaces on Wednesday furthermore included Shin’s house and his payment app Chai Corp, the Seoul Southern Area Prosecutors Office mentioned via a text message, credit reporting an earlier report from MBC News. Law enforcement also visited 2 affiliated firms, the spokesperson for the prosecutors said, declining to supply further detail in an ongoing investigation.
Policymakers around the world have zeroed in on stablecoins given the turmoil in the crypto markets, most notably the collapse of the well-known TerraUSD token in-may. That spurred a debate about whether or not blowups of crypto experiments could cause a risk towards the wider financial system, along with calls for stronger regulation.
In Korea, prosecutors conducted raids this week on fifteen areas, including seven local exchanges for example Upbit, Bithumb plus Gopax. The motion takes place about a month after authorities banned current and former employees of Terraform Labs from leaving behind the country. Prosecutors summoned a former official in an unit of Terraform Labs for asking, KBS TV document has reported.
Prosecutors are also considering whether the company’s founder Do Kwon evaded taxes by shifting profits from cryptocurrency transactions to an offshore account, the local news agency Yonhap reported.
Shin and Kwon, who is believed to be in Singapore, did not immediately respond to demands for comment. Considering that TerraUSD imploded, Shin has put up the notice on his app distancing himself through Kwon and TerraLabs.
TerraUSD crashed from its dollar peg in early May once the complex algorithm-based system involving the sister Luna token that was meant to safeguard the peg failed to work as prepared.
That coin, also known as UST, had been supposed to maintain a 1-to-1 peg towards the dollar through an algorithm and trading in Luna. The design was different from some other stablecoins that purport to be backed simply by cash and similar assets. But the implosion rendered Luna almost worthless, setting off a rout in cryptocurrency markets.
Several Luna investors filed a complaint along with South Korean prosecutors in May, alleging Kwon and his company got committed fraud and engaged in illicit fundraising. – Bloomberg