South Korean prosecutors raid top exchanges amid Terra probe
According to a report published by The Korea Herald, South Korean investigators from the Seoul Southern District Prosecutor’s Office raided top cryptocurrency exchanges, including Upbit, as part of an ongoing investigation into the failed Terra blockchain.
South Korean police and prosecutors launched an investigation into Terraform Labs, the company behind the troubled crypto project, in early June due to allegations of embezzlement and tax evasion.
The massive explosion of Terra also prompted South Korea to revive its special financial crime unit.
Earlier this July, Yonhap news agency reported that South Korean officials reached an agreement with their US counterparts to share investigation data about the troubled crypto project, whose sudden collapse resulted in losses of nearly $40 billion.
While Terra’s Do Kwon attempted to revive by ditching the TeraUSD (UST) stablecoin and launching a new token, Terra failed to make a successful fresh start. The coin is down more than 80% soon after the launch. The new Luna cryptocurrency is currently ranked 139th by market cap, a huge loss for a project that once had two coins in the top ten.
Last month, Kwon, Terraform Labs and other parties involved in the disaster were sued alleging defendants mislead investors by promoting unregistered securities.
Before the project’s collapse, Kwon had repeatedly ridiculed critics who doubted the stability of the stablecoin.
Stablecoins have also faced greater regulatory scrutiny around the world following the Terra disaster.