South Korean Prosecutors Raid Upbit and Other Local Crypto Exchanges Over Terra’s Crash

A group of investigators from the Seoul Southern District Prosecutors Office raided local crypto exchanges on Wednesday in an ongoing investigation into the infamous Terra Luna crash, Yonhap News Agency reported.

As stated in the report, authorities went on a raiding spree on seven crypto trading platforms suspected to have aided the sudden collapse of Terra that wiped off millions of dollars from Korean investors.

Korean Prosecutors Sizes Transaction Records

The exchanges, which included Upbit, Bithumb, and Coinone, were raided around 5:30 p.m, and the investigators confiscated working materials and transaction records from the firms. The officers also raided eight homes of individuals suspected of being familiar with the case. 

As per the report, the authorities plan to analyze the procured materials and interrogate witnesses involved with the matter before determining whether Terra’s crash was caused by the company’s controversial CEO, Do Kwon, among other potential irregularities. 

The Infamous Terra Crash

The Terra fiasco occurred in May after the project’s algorithmic stablecoin UST, currently known as USTC, lost its parity from the U.S. dollar and crashed to zero. Terra’s governing token, LUNA, also plunged from its all-time high of $66 in January and continued to fall until it became valueless. 

The catastrophic collapse of the $40 billion project coupled with the Federal Reserve interest rate hike in June caused an adverse chain reaction to the entire crypto market resulting in the fall of other firms that invested heavily in Terra. 

Meanwhile, Korean investors were among the victims of the Terra crash. In May, Confomania reported that the affected investors filed a lawsuit against Do Kwon and co-founder Daniel Shin for fraud. 

Another group of 1,500 Korean investors known as the “Victims of Luna, UST coins” were reportedly making plans to take legal action against the founders for illegal fundraising. 

Kwon was also slammed with tax evasion charges from the country’s tax regulators with a fine of $78 million. While he was still battling foes, the Terra CEO was accused of cashing out billions of dollars before the crash. However, Kwon blatantly denied the accusation, describing it as “categorically false.”