Terra-Luna cryptocurrency founders sued for fraud in South Korea

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Terra-Luna cryptocurrency founders sued for fraud in South Korea

After investing in the two main tokens of and having practically lost their participation portfolio, several South Korean citizens sued Do Kwon and Daniel Shin, and CEO and co-founder, respectively, of the cryptocurrency company Terraform Labs.

Yesterday, a law firm representing the investors filed with the Seoul Southern District Prosecutor’s Office against the two businessmen (Do Kwon and Daniel Shin) for fraud and violation of the law regulating fundraising. .

These are five investors whose losses amounted to 1.4 billion won (equivalent to 1.1 million dollars).

In this regard, cryptocurrency investors in South Korea and internationally, such as in the United States and Italy, are already analyzing the demand.

As will be recalled, TerraUST, the supposed stablecoin that should have maintained a parity of 1 dollar, and its digital currency counterpart, Luna, trade in the range of 10 cents and almost zero cents, respectively, with which they registered falls of more 99.9% from its maximum levels.

However, in recent days, and due to the fluctuations of the market that naturally leads to extreme highs and lows, it ended up with almost 38,000 million dollars of investors’ money in less than a week, according to data from CoinMarketCap .

This flash crash dealt a blow to young tech-savvy investors who were betting on algorithmic, albeit experimental, cryptocurrencies amid the recent boom in these digital assets.

Various anti-suicide alerts were even released due to the crises that were unleashed and in which several investors reported loss of their assets, houses, money and other assets, as in the case of Korean investors.

The law firm disclosed in a statement that Kwon and others failed to properly notify investors of an algorithm error while attracting investors through the planning and issuance of Luna and UST, so “the act itself is a fraud”.

As you may recall, Do founded Terraform Labs in 2018 with Shin, founder of TMON Inc., one of the leading e-commerce operators in South Korea.

South Korean financial authorities estimated at least 28,000 local investors holding around 70 billion Luna cryptocurrencies.

According to the lawyers, Terraform Labs participated in a fraud by promising an annual rate of return of 19.4%, which did not happen.

For his part, Do Kwon said in a blog post that his company is working on ways to maintain its Terra blockchain and ecosystem, despite the collapse of its cryptocurrencies.

The businessman, now sued, reconsidered the creation of new currencies. If the proposal is approved, he would leave behind UST and Luna, which would be called Terra Classic and Luna Classic, respectively.

With information from Yonhap News Agency

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