Do Kwon, the Terraform Labs CEO and founder, may be in trouble with financial and law enforcement authorities in Singapore and South Korea as the bad month for the Terra ecosystem continues.
The recent rapid decline and collapse of LUNA and Terra’s algorithmic stable coin TerraUSD (UST) that occurred last week has been the central topic of discussion in the crypto industry as its investors suffered 99.9% financial loss dues to the crash event.
Following the reports that Kwon may have dissolved two of his company’s domestic subsidiaries in late April, the CEO will face a new headache with South Korea’s top financial regulators.
On Tuesday, the National Assembly’s Political Affairs Committee summoned him for a parliamentary hearing on the LUNA/UST crash.
According to Newsis, Financial regulators claimed that the Terra ecosystem’s dramatic fall affected 200,000 to 280,000 South Korean investors. At least 170,000 investors are estimated to have LUNA holdings on South Korea’s four largest domestic exchanges.
Also, various South Korean exchanges have reacted differently to the Terra LUNA/UST collapse and have either delisted the tokens or are in the process of doing so. Korbi, Coinone, and Gopax have already closed all transactions for LUNA, and Bithumb plans to cease support for LUNA on May 27.
The Financial Supervisory Service Commissioner, Jeong Eun-bo, who answered questions on LUNA at an executive-level summit, stated:
“There is a concern that trust in the virtual asset market will suffer (as a result), and that there will be damage for users. We will also conduct in-depth discussions with major overseas supervisors regarding the cryptoasset (eco) system in the future.”
Jeong Eun-bo stated further that the role of the supervisory authorities is quite limited, noting the need to identify the cause of the cause of the crash and the nature of the damage to prevent unfair trades.
Furthermore, the Financial Intelligence Unit, the Financial Services Commission, and the Financial Supervisory Service are currently in the process of checking the LUNA and Terraform Labs related projects white papers, investor-related data, and others, and have requested the South Korea exchanges to also provide them with information related to the token trade.