South Korean prosecutors have executed raids on seven local crypto exchanges as part of the ongoing investigation into Terraform Labs’ activities. Search and seizure operations have been carried out on several exchanges and related offices looking for evidence of illegal practice involved in the collapse of the cryptocurrency Luna in May.
According to Yonhap News Agency, a team of investigators from the Seoul Southern District Prosecutors Office began seizing transaction records and other materials from Upbit, Coinone, Bithumb, and four other local exchanges. Raids were also conducted in eight other places, including the homes and offices of people involved in the case. The team tasked with the investigation reportedly plans to study the material and question witnesses to assess the size of the damages suffered by investors and to determine whether the CEO of TerraLabs, Do Kwon, intentionally caused to collapse of the Terra ecosystem.
Terra’s UST algorithmic stablecoin, along with the LUNA token collapsed in May after losing its peg to the U.S. dollar, wiping out $60 billion of investors' wealth from the crypto market. The collapse of the ecosystems has since attracted regulatory scrutiny across the globe with the U.S. Securities and Exchange Commission (SEC) looking into the possible violation of federal investor protection rules regarding UST marketing strategies. South Korean authorities have launched a separate investigation to establish whether there was intentional price manipulation that could have been behind the collapse of UST.
In June, South Korean authorities banned former and current employees of Terraform Labs from leaving the country. A class-action lawsuit has been also been brought against Kwon and Terraform Labs by the U.S. District Court in Northern California.
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