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All Terra employees are summoned to investigate LUNA. case

Terraform Labs employees have been invited by the prosecutor’s office to help investigate the violations that led to the LUNA cryptocurrency disaster.

The South Korean government is still in the process of investigating Terraform Labs, the founder of the LUNA cryptocurrency project. As a last measure, the authorities of this country have summoned all the operators and programmers of this organization to a special investigation team to attend to the process of clarifying the case.

According to JTBC, the Securities and Financial Investigation Team of the Seoul Southern District Prosecutor’s Office invited all Terraform Labs employees to investigate and seize relevant documents. These people have been involved in the early development of LUNA (now LUNC), UST since 2019.

According to the report published by the authorities, the investigation team is investigating signs of intentional price manipulation, as well as the procedures for listing LUNA and UST tokens.

Disclosures from research documents show that some Terraform Labs employees opposed the introduction of LUNA and UST because the previous prototype had failed.

“When you pay investors a dozen percent without a mortgage or a consistent return model, a lot of people go to them at first. But at some point, he has no choice but to collapse. It was because he couldn’t handle interest rates and price fluctuations,” one employee revealed.

JTBC reported that Terraform Labs developed a stablecoin called “Basic Cash”, which works similarly to LUNA-UST. The price of this digital currency has crashed just 3 months after its launch, following the initial bull run.

Despite this failure, the company’s CEO, Kwon Do-hyung (Do Kwon), launched the Terra ecosystem in 2019. In May, the project almost fell apart when the price of LUNA fell by as much as 99%, almost steel. While the UST stablecoin also missed the $1 price mark.

In addition, the prosecution is expanding its investigation to the entire project. The issues being considered are price manipulation or whether Korean exchanges are censoring the project according to standards.

Many crypto investors in South Korea suffered heavy losses after the LUNA crash. They filed a lawsuit against Do Kwon and Daniel Shin, the two founders of Terraform Labs. JTBC said 67 victims have filed complaints, with total damages amounting to 6.7 billion won ($5.4 million).

The LUNA founder is also suspected of tax evasion and absconding prior to the incident. However, Do Kwon announced on social media, denying the previous accusations.

On May 19, South Korea established a task force to investigate the LUNA cryptocurrency disaster. The newly formed team, which includes prosecutors from the Financial Services Commission and the Financial Supervision Commission, will investigate how Terraform Labs used to solicit capital from investors. According to SBS News, the newly formed team consists of 48 people, similar to the model that was abolished two years ago during Korea’s procedural reform.

The institution was previously known as “Death Yeoui-do”, named after the Yeoui-do business district in Seoul.

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