South Korea Bans Terraform Labs Employees From Leaving The Country Amid Pending Crypto Investigation

According to the latest reports from the Financial Times, South Koreans have prohibited employees of the Terraform Labs from leaving the country as the settlement regarding an investigation is yet not over. This is in relation to its cryptocurrency crash that led to a wipeout of $40 billion.

Various allegations put on the founders of Terraform Labs include that the company misled investors with flawed algorithmic stablecoins.

Moreover, as Bloomberg reports, travel restrictions are levied on 15 individuals involved with the platform, including former project devs for the Anchor lending protocol.

Following the dramatic meltdown of the TerraUSD that washed up $40 billion in market value for UST holders and Luna, its sister’s token, the regulators have become active in their investigation into the company.

It is also being said that prosecutors might even invalidate the South Korean passport of Do Kwon, the co-founder of Terraform Labs.

Kwon has been instructed by the US court to act in accordance with subpoenas from the SEC in relation to the sale of potential unregistered securities.

The SEC is investigating a trading network developed on the Terra ecosystem that provided customers with a token that closely tracked the prices of Amazon.com Inc (NASDAQ: AMZN) and Apple Inc (NASDAQ: AAPL), which are among the largest U.S.-listed companies.

According to a U.S. class-action lawsuit, Kwon and his company allegedly sold unregistered securities and repeatedly misled investors through “touting the stability of UST.”

Terra collapse was one of the major factors that led to a downturn in the value of cryptocurrencies and the crypto market faced one of the worst phases. Flagship currencies, Bitcoin and Ethereum, went through a significant drop in their prices. Bitcoin plunged 70% from its all-time high in November last year. Over the weekend, it even lost the $18,000 support. However, on Sunday it rebounded back to around $20,000. At the time of writing, the top cryptocurrency was trading at $20,194.26.

The top altcoin Ethereum, too, dropped below $1,000 but quickly rebounded. Its price stood at $1,079.64 as of this writing.

Launched in 2020, the TerraUSD traded at a stable price of $1. But, it de-pegged in early May.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing