The Terra scandal is a made-for-television story that has been at the epicenter of the collapse of the crypto market in 2022. In South Korea, prosecutors investigating the Terra scandal have requested that the Ministry of Justice deliver a “notice upon arrival” to the company’s CEO, Do Kwon. Shin Hyun-seun, also known as Daniel Shin, who was a co-founder of Terraform Labs, is apparently subject to a travel ban at the request of the investigators. Herald Corp., a local news agency, was the one who broke the story about the development.
The investigators will be notified via a “notice upon arrival” mechanism if and when Kwon crosses South Korean territory. When an urgent active investigation is being conducted on a suspect who has departed the jurisdiction, such actions are taken. According to recent reports, Kwon is actually residing in Singapore at the moment. However, upon communicating with news agencies, the prosecutor’s office did not divulge any information regarding Kwon’s whereabouts.
South Korea To Execute Digital Asset Reforms
Worried by the Terra-LUNA debacle, South Korean authorities have decided to go ahead with comprehensive reforms for the crypto space. According to a news release issued by the regulatory agency, the Korean Financial Services Commission (FSC) will prioritize examining limits on the scope of activities and subsidiaries of financial enterprises, including banks and securities firms. This assessment will take place as part of the FSC’s regulatory agenda.
The Korea Federation of Banks (KFB) has proposed to the Financial Services Commission (FSC) that banks be permitted to conduct business in the cryptocurrency market. Current restrictions prohibit banks from acquiring more than 20% ownership in a non-financial company. In addition, banks are restricted from directly participating or having affiliates within the crypto industry. Regional banks have only been permitted to participate in South Korea’s substantial cryptocurrency market through investments.
The Terra Debacle Probe Developments
Following the de-peg of the TerraUST and the collapse of the Terra network in May, investors in Terra filed a lawsuit against both Shin and Kwon. On the other hand, Shin stated that he severed all relations with the corporation in the year 2020. Recently, Shin has been in the headlines as a result of a search warrant executed at his home by investigative authorities in South Korea. His payment platform, Chai Corp, was also examined as part of the string of raids that the government carried out against other businesses. They also investigated cryptocurrency exchanges such as Upbit, Bithumb, and Gopax, among others.
In addition, the investigation led to the discovery of a Terra subsidiary known as FLEXE Corporation. According to the allegations, FLEXE was utilized to transfer funds from other countries into companies associated with Terra. When the investigators visited the location that was stated, the corporation was not present on the premises in any way. In addition, KBS, a news network in South Korea, asserts that the entity in question was a defunct paper manufacturing business.
Because of its recent fall from grace, the Terra network has split into two, and the new blockchain has been given the name “LUNA.” The previous blockchain has been rebranded as LUNA Classic (LUNC). At the time of publication, LUNA was trading at $1.72, representing a gain of 2.4% over the course of the previous 24 hours. On the other hand, trade activity for LUNC was recorded at $0.00009535, representing a 4.6% increase over the course of the preceding 24-hour period.
