The legal troubles around Terraform Labs, the company behind the collapsed Terra (LUNA) ecosystem, are deepening after South Korean authorities launched investigations into one of the firm’s employees over alleged Bitcoin embezzlement.
Seoul police indicate that the employee embezzled the Bitcoin personally from the company in May last year, South Korean news outlet Chosun Biz reported on June 7.
According to officials, no link has been established between the embezzlement suspect and Terra founder Do Kwon, nor has the amount of Bitcoin in question yet been revealed.
The investigation was launched after authorities received intelligence reports regarding the suspect’s alleged fraud. Consequently, the Seoul police asked exchanges used in transacting the crypto assets to freeze the employee’s accounts.
Kwon troubles escalate despite LUNA 2.0 launch
Although Terraform Labs has embarked on the ecosystem’s rebirth through the LUNA 2.0 launch, there are piling concerns regarding the role of Kwon in the collapse. In this line, the Seoul prosecution office is investigating allegations of fraud involving the troubled CEO.
To unearth what happened, prosecutors recently questioned Terraform Labs’ employees involved during the blockchain’s initial development. Notably, sources close to the matter indicate that the targeted employees were allegedly against the launch of UST stablecoin over possible “fluctuations in value.”
Furthermore, the investigation is centered on determining whether the UST stablecoin listing followed the proper listing channels when applying to exchanges.
Kwon on the spot for money laundering
Elsewhere, Kwon was recently in the spotlight over allegations of money laundering. As reported by Finbold, Terraform Labs reportedly laundered $4.8 million through a South Korean shell company. The company allegedly deployed a scheme involving a “blockchain consulting firm K” based in Seoul.
Interestingly, efforts by Kwon to regain market confidence through LUNA 2.0 was met with objection, with several crypto opinion leaders terming the move as another potential fraud.
Authorities have also reignited the regulatory debate in the wake of the Terra ecosystem crash.
For instance, South Korea resorted to harsher laws on crypto by forming the “Digital Assets Committee.” The body’s primary focus will be to unveil strict crypto regulations as part of consumer protection.
Source: https://finbold.com/terraform-labs-employee-under-investigation-for-embezzling-firms-bitcoin/