South Korean police have reportedly requested exchanges to ‘freeze’ the assets of Luna Foundation Guard (LFG), a non-profit organization set up to support the Terra (LUNA) cryptocurrency.
A news report Published on Monday by Korean national broadcaster KBS, the Cybercrime Police Unit of the Seoul Metropolitan Police Agency had written to several exchanges, highlighting the need to block withdrawals of corporate funds initiated by LFG.
According to the report, investigators associated with the First Cybercrime Investigation Unit are convinced that the embezzled funds related to the LUNA collapse are being held in LFG accounts, thus requiring a freeze.
not under exchange obligation
But despite police requests, the report says exchanges are currently under no obligation to comply. Because there is no legal requirement to do so, exchanges are at liberty to take action as deemed fit, KBS noted.
LUNA and TeraUSD (UST) collapsed dramatically this month, de-pegging the value of stablecoins to zero in on the dollar. The LUNA coin also crashed 100%, setting in motion actions that include a lawsuit against Terraform Labs and potentially tougher sanctions from regulators, including South Korean lawmakers.
Amidst all this, there are question marks over how the LFG handled the reserves under its control, with the organization saying it spent 80,000 BTC trying to protect the UST peg.
An update from the foundation on May 16 showed that its reserves included 313 BTC, 39,914 BNB, and 1,973,554 AVX, as well as 1.8 billion UST and over 222 million LUNA.
As of 1/Saturday, May 7, 2022, the Luna Foundation Guard held a reserve containing the following assets:
80,394 $BTC
39,914 $bnb
26,281,671 $USDT
23,555,590 $USDC
1,973,554 $AVAX
697,344 $UST
· 1,691,261 $luna— LFG | Luna Foundation Guard (@LFG_org) 16 May 2022