While FTX took the spotlight from other ecosystems that had collapsed, South Korean authorities are still working to provide closure for Terraform Labs, the victims of the year's first crypto collapse. On suspicion of inflated profits, South Korean authorities froze almost $104.4 million (140 billion won) from co-founder Shin Hyun-seong over six months after the Terra (LUNA) blockchain was formally shut down.

The Seoul Southern District Court agreed to the prosecutors' plea to freeze Shin's assets, which totaled more than $104 million. The allegation was Shin's participation in the sale of pre-issued Terra tokens to unwary investors.

According to local news outlet YTN, The district court froze the allegedly stolen funds until further investigations are conducted out on the basis of suspicions of benefitting from unauthorized LUNA sales.

The preindictment preservation of the funds is a technique to prevent hackers from disposing of stolen money and inflicting further losses or financial harm on the investors.

Authorities in South Korea are currently looking into two charges: generating unauthorized gains from the issuance of the company's own tokens, LUNA and TerraUSD (UST), and giving Terraform Labs access to customer transaction data through Chai, a Korean payment app connected to Terra.

The suspected co-founder was ordered to appear in court on November 14 as part of an inquiry into the failure of the company by South Korean prosecutors.

Prosecutors charged Terra co-founder Do Kwon with price-fixing during the first week of November.

"It's highly disappointing to see the Korean prosecutors continue to try to contort the Capital Markets Act to fit their agenda and push baseless claims. Prior judicial decisions and statements by the Korean financial authorities, including the FSC, establish that cryptocurrency tokens are not investment contract securities," said Terraform Labs spokesperson in a written statement.

Nov 19, 2022
Crypto News

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