The harrowing story of the crash of the Terra LUNA and TerraUSD (UST) stablecoins — referred to by a few as the Lehman Brothers of the crypto ecosystem — has taken yet another turn as court documents reveal the dissolution of two South Korean offices and the liquidation of the Terraform Labs Korea arm days before the collapse of the two stablecoins. The news, reported by South Korean news outlet Digital Today, highlighted that Terraform Labs founder Do Kwon successfully carried out the liquidation of two offices and an entire organization.
According to the records, the headquarters based in Busan and the Seoul offices were agreed to be liquidated during the company’s general shareholders meeting on April 30. The Busan headquarters was dissolved on May 4 while the Seoul office was liquidated on May 5, with the liquidator’s name being Kwon Do-Hyeong, which is the full name of Terraform Labs’ founder Do Kwon.
Do Kwon founded the South Korean offices of Terraform Labs back in 2019, a year after he established the company in Singapore. The timing of these liquidations has raised multiple questions within the ecosystem because of their obvious correlation to the catastrophic events of the Terra LUNA and TerraUSD (UST) stablecoin in the early hours of May 10. Reports noted that questions were being raised in the crypto community regarding the number of other companies founded by Kwon before establishing Terraform, including the one he resigned from back in 2017.
In another report, Digital Today indicated that both South Korea’s top financial regulators, including the Financial Services Commission and the Financial Supervisory services, launched “emergency checks” and “emergency measures” in an effort to regulate and investigate certain trends in the cryptocurrency market. No other details pertaining to LUNA have been revealed so far.
On the other hand, the anonymous crypto investor who trespassed into Do Kwon’s residency has apparently turned himself into the legal authorities. The trespasser did what he did because he had “failed” and was “broke” because of his LUNA and TerraUSD investments. He voluntarily surrendered himself into police custody on early May 16 at Seondong Police Station, Seoul.
A Deeper Insight Into the Events Following the Terra LUNA and UST crash
Do Kwon is already under severe scrutiny by the South Korean authorities for corporate and income tax evasion following the collapse of his stablecoins, according to local news outlet Naver. The country’s National Tax Service found Kwon guilty of evading tax and had ordered him to pay a sum amount of $75.5 million.
In an effort to save the company’s native tokens, Luna Foundation Guard (LFG) — Terraform Labs’ non-profit Singaporean arm — dumped its reserves from other digital currencies, thereby resulting in the collapse of other cryptocurrencies. South Korea’s Minister of Justice Huan Dong-hoon is reportedly actively involved in the investigation against Do Kwon.
In terms of cryptocurrency prices, Terra is trading down 4.43% at $0.0001794 as of this writing. On the other hand, Bitcoin (BTC) — the world’s largest and most popular cryptocurrency — strongly rallied overnight into May 20 as the U.S. dollar declined. The cryptocurrency has been trading in a narrow range throughout this month as it attempted to regain its high of mid-2022. According to reports from TradingView and Cointelegraph Markets Pro, the price of Bitcoin was at a whopping $30,725 on Bitstamp.
