Unusually Prolonged Search and Seizure in 'Luna·Terra Incident'... Continued Summons of Related Persons Expected

15 Locations Including 7 Exchanges Under Investigation for a Week
Affiliated Company Employees Summoned for Interrogation... Investigation Intensifies

[Asia Economy Reporter Yoo Byung-don] The prosecution investigating the 'Luna·Terra (UST) crash incident' has concluded the week-long search and seizure operations. Once the analysis of the seized items is complete, the prosecution is expected to summon related individuals for a full-scale investigation.

The Financial Securities Crime Joint Investigation Team of the Seoul Southern District Prosecutors' Office completed the execution of search warrants conducted from the 20th to the 27th on domestic cryptocurrency exchanges such as Upbit, Bithumb, Coinone, Korbit, Gopax, and Terraform Labs affiliates.

Not only seven exchanges but also the residence of Shin Hyun-sung, co-founder of Terraform Labs and chairman of the board of Timon, as well as affiliates such as Kernel Labs, Chai Corporation, The Encore Company, and Plexi Corporation were included in the search targets.

During this process, the prosecution reportedly secured transaction records of Terraform Labs CEO Kwon Do-hyung and Chairman Shin, materials related to the development process of the algorithmic stablecoin, and documents concerning the flow of funds. After analyzing the seized items, they plan to summon the related parties.

It has been reported that the prosecution has been investigating Kernel Labs employees, suspected to be de facto affiliates of Terraform Labs, as witnesses since early this week. Additionally, several Kernel Labs employees have been subjected to travel bans. Kernel Labs is a consulting firm founded by developers from Terraform Labs, and the prosecution understands that this company functions as Terraform Labs' Korean branch.

The prosecution previously issued a travel ban order against Chairman Shin and arranged for automatic notification to the prosecution upon entry for CEO Kwon, whose whereabouts are currently unknown. CEO Kwon is suspected of issuing coins without informing investors of the risk that the cryptocurrency price could crash and attracting investments by guaranteeing unsustainable high returns.

Earlier in May, the prices of the cryptocurrencies Luna and Terra issued by Terraform Labs plummeted within a week, wiping out approximately $45 billion (57.0375 trillion KRW) in market capitalization, causing estimated damages to about 200,000 domestic investors.

Some victims have filed complaints with the prosecution against Terraform Labs, CEO Kwon Do-hyung, and three co-founders on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud) and the Act on the Regulation of Conducting Fund-Raising Business Without Permission. Besides these, 104 domestic victims have submitted complaints and accusations, with damages amounting to 10.1 billion KRW.

This content was produced with the assistance of AI translation services.