South Korea is leaving no avenue unexplored to get to the bottom of the crash of Terra. The South Korean Ministry of Justice announced the revival of the previously dormant “Grim Reapers of Yeoui-do” investigative unit.
The unit, which was disbanded in 2020, is a joint financial and securities crime investigation team from the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS).
According to a report from local news outlet SBS News, the first case the unit will handle is Terra’s fall. The investigation is intended to look into the damages that the price of Terra tokens, LUNA and UST, caused to South Korean citizens.
“As the Luna and Terra case is a case of multiple damages to the common people, it was designated as the first investigation case by the Hap Sudan after an internal review by the Ministry of Justice,” an official told the news outlet.
The Ministry of Justice has already estimated that around 280,000 investors were affected. The brief also alleges that Terra’s promise of 20% annual returns to lure in investors was illegal and amounts to being a Ponzi scheme.
The Grim Reapers of Yeoui-do investigative unit earned its nickname for its accuracy and clinical approach. While it was in operation between 2013 and 2020, the team made 346 arrests from 965 cases.
After investigating Terra, the unit is slated to resume its uncompleted investigation into the $1.2 billion Lime Asset Management embezzlement scandal in 2020.
Terra’s legal troubles increase despite a recovery plan
Meanwhile, the legal troubles of the Co-founders of Terra, Do Kwon, and Shin Hyun-Seong, along with core members of the Terra team—the main targets of the investigation—are compounding. Reports indicate that Do Kwon is now being faced with tax evasion charges.
Similarly, several lawsuits have been filed by LUNA and UST investors against the company and Kwon both in South Korea and Singapore, where it has its headquarters. These have been despite the recovery plans that Do Kwon has proposed.
The elaborate remedy proposed by Kwon includes a split of the current Terra blockchain into an entirely new chain. Compensation will then be given to holders of the current token, excluding the Terraform Labs (TFL) and the Luna Foundation Guard (LFG).
This will essentially make the new Terra blockchain a community chain, Kwon stated. He also encouraged developers and community members to support the proposal when LFG posted the proposal for voting.
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