Terraform employees under probe for UST collapse in South Korea

In the quest for answers pertaining to the illness of the Terra ecosystem earlier this month, South Korean authorities are present summoning each employees of Terraform Labs, which developed Luna Classic (LUNC) and TerraUSD (UST).

According to a local quality report, the associated fiscal and securities transgression probe portion of the Seoul Southern District Prosecutors’ Office has subpoenaed each Terraform Labs employees.

One of the employees already testified that determination were interior concerns regarding the sustainability of Terra, the study said. Terra laminitis Do Kwon was warned that the tokens could illness astatine immoderate time, said the unnamed worker progressive successful processing the tokens successful 2019. However, the CEO chose to disregard those warnings and forced the motorboat of the tokens, the worker said.

The worker added that the tokens were launched contempt the nonaccomplishment of a aviator exemplary wrong the company.

With the investigation, South Korean authorities are trying to find if determination was intentional terms manipulation of LUNC oregon UST. Authorities are besides looking into whether the tokens followed due procedures for listing connected home exchanges.

Investigators are acrophobic that Terra’s tokenomics was faulty since UST was not pegged to immoderate unchangeable collateral and had nary sustainable nett model.

Jeremy Allaire, CEO of Circle, which issues the second-largest stablecoin USDC, told Protocol successful an interrogation aft the illness that Terra was a “house of cards” that was bound to fail.

In South Korea, the fig of investors impacted by the Terra illness is pegged astatine 280,000 by the Financial Services Commission. Some affected investors person filed a class-action suit against Do Kwon and Terra co-founder Shin Hyun-Seung.

Lawmakers besides want Do Kwon to attest astir the collapse successful beforehand of the National Assembly of the South Korean parliament. The constabulary person asked home exchanges to frost the assets of Luna Foundation Guard, the non-profit supporting the Terra ecosystem.

Meanwhile, regulators are trying to tighten scrutiny of crypto exchanges successful the state successful airy of the Terra fiasco.

The latest improvement comes amid Do Kwon’s attempts to revive the Terra ecosystem with Luna 2.0. The caller token, which launched connected May 28, crashed by astir 80% soon aft launch.