South Korean Police Raid Several Crypto Exchanges In Connection to Terra
Soth Korean exchange Upbit and other cryptocurrencies exchanges were raided by police on Wednesday, by a group of detectives looking into the fraud case connected to the fall of Terraform Labs' tokens TerraUSD (UST) and LUNA, according to a report by Yonhap News Agency.
According to the report, the offices of Upbit, Bithumb, Coinone, as well as four other local exchanges were raided by Seoul Southern District Prosecutors Office, beginning around 5:30 p.m local time, the officers are said to have taken transaction records and other evidence.
The team hopes to study the materials and question potential witnesses to measure the extent to which the collapse of TerraLabs had on its investors, and if its CEO Do Kwon, purposefully sought after the failure of the Terra ecosystem.
The team behind the investigation also raided several other locations including the offices and homes of those potentially connected to the case.
After de-pegging from the U.S dollar, Terra’s algorithmic UST stablecoin, collapsed this past May due in part to large withdrawals coming from the Terra DeFi platform Anchor. This resulted in billions of people's wealth being eliminated from the market.
The fall of Terra also saw many countries beginning to question whether the regulatory safeguards were in place for the people affected by the collapse, leading to much backlash on the industry.
The U.S. Securities and Exchange Commission (SEC) is currently investigating the potential of a violation of its federal investor protection rules in connection to Terra's marketing practices.
In South Korea, authorities launched a full-blown investigation in May, looking into whether price manipulation and other ill-intention moves were behind the fall of UST.
As well as a class-action lawsuit being sought against the CEO Do Kwon, and Terraform Labs by the U.S. District Court in Northern California.
Do Kwon claims to be “devastated” by the collapse of the project. The Terraform Lab’s co-founder claims to have lost most of his wealth in the crash, and denies claims the project was a scam.