Terra (LUNA) Founder Do Kwon Facing South Korea Investigation Over Claims of Ponzi Fraud: Report
The CEO of Terraform Labs is facing possible criminal charges in the wake of two leading cryptos collapsing earlier this month.
In a new report, Yonhap News says that South Korean authorities are considering bringing Ponzi scheme charges against Do Kwon, the founder of Terra (LUNA) and algorithmic stable coin TerraUSD (UST), both of which have plummeted by over 99.99% recently and causing losses of around $40 billion.
At issue is the Anchor Protocol, a decentralized finance (DeFi) platform built on top of the Terra ecosystem’s blockchain, which offered investors of UST returns of approximately 20%.
The report says that the Financial and Securities Crime Joint Investigation Team will investigate the case, and quotes one member of the prosecutor’s office as saying,
“Kwon’s remarks promising returns could provide a key clue.”
Do Kwon and fellow Terraform co-founder Daniel Shin are also being sued by five investors who claim to have lost $1.1 million due to “fraud and other financial irregularities,” says the report.
The legal pressures on Kwon come in the wake of Luna Foundation Guard (LFG) dumping billions of dollars worth of Bitcoin (BTC) in an attempt to salvage UST after it de-pegged from the US dollar.
At time of writing, Terra is worth a tiny fraction of the $80 price tag it held just weeks ago, currently trading for $0.000131.
While TerraUSD did briefly recover to the $0.25 level back on May 14th, the crypto asset has been steadily falling from its weekly high of $0.11 this past Monday.
UST is down 19.25% over the last 24 hours and priced at $0.063425.
Check Price Action
Don’t Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Digital Store/Natalia Siiatovskaia
The post Terra (LUNA) Founder Do Kwon Facing South Korea Investigation Over Claims of Ponzi Fraud: Report appeared first on The Daily Hodl.
Go to Source
Author: Daily Hodl Staff
