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Terraform Labs Probed for Alleged Bitcoin Embezzlement Following UST Collapse: Report
South Korean authorities are investigating, saying the implosion affected about 280,000 citizens.
Updated May 11, 2023, 5:40 p.m. Published Jun 9, 2022, 8:17 a.m.
South Korean law enforcement agencies are investigating Do Kwon's Terraform Labs, following last month's collapse of its controversial algorithmic stablecoin, terraUSD (UST), according to a report by the Financial Times.
- Terraform Labs held $3.5 billion worth of bitcoin in its reserves in a failed attempt to stabilize the price of UST.
- Daniel Shin, a co-founder of Terraform Labs, denied allegations of fraud, telling the Financial Times that there was "no intention of deception" and that the company wanted to innovate the payment settlement system using blockchain technology.
- Last month, South Korean authorities estimated that around 280,000 of the country's citizens were affected by the collapse of UST and luna, which is now known as luna classic (LUNC).
- Since the implosion of Terra's stablecoin, the company released a new LUNA token that was airdropped to previous holders. LUNA is trading at $3.12 with a market cap of $642 million.
- Terraform Labs didn't immediately respond to a request for comment.
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