Sout South Korean prosecutors have banned dozens of people involved with Terraform Labs from leaving the country as they expand their investigation into the $ 40 billion collapse of the company’s cryptocurrency, which has devastated traders around the world.
The Southern Seoul Prosecutor’s Office yesterday summoned them for cross-examination as they were trying to determine if the company had committed fraud or violated financial regulations before the digital currencies TerraUSD and Luna exploded in May. He said he was planning to do it.
The office may include current and former staff and developers, but did not identify the number of people or who they were under a one-month travel ban. The prosecution refused to provide details, saying the investigation was underway.
Former Terraform developer Daniel Hong tweeted a government notice stating that he was banned from leaving the country until July 19. Mr. Hong tweeted. Today, we have imposed a ban on all former @terra_money employees. “
The collapse of TerraUSD and Luna, developed by Terraform Lab’s co-founder of Stanford University, DoKwon, has affected an estimated 280,000 Korean investors and caused widespread turmoil in the global cryptocurrency market.
TerraUSD is designed as a “stablecoin” and is fixed to stable assets such as the US dollar to prevent significant price fluctuations. However, after Stablecoin fell well below the $ 1 peg in May, the market value of TerraUSD and its fluctuating sister currency, Luna, was erased by about $ 40 billion.
South Korean prosecutors launched an investigation last month after receiving collective complaints from dozens of investigators. They are reportedly in Singapore and may try to summon Kwon, who is facing the accusations that he is exaggerating the stability of the currency.
The Bank of South Korea, the central bank of South Korea, said in a report released earlier this month that the collapse of TerraUSD and Luna was the main reason why the global currency market shrank by more than 40% compared to its market capitalization at the end of last year. Said. It has reached over $ 2.3 trillion. Banks said the Fed’s recent decision to raise key interest rates to combat inflation also contributed to the slide by further driving investors away from volatile assets. MDT / AP