Opening of investigations on Terra

After the information that Make Kwon (from his real name Kwon Do-hyeong) reportedly dissolved two domestic branches of his company as early as the end of April, the CEO is now facing a new headache: South Korea’s top financial regulators are on the warpath.

Source: Adobe / slawavorster

Regulators say between 200,000 and 280,000 South Korean investors have been “affected” by the token’s dramatic drop, Newsis reports. The number of investors holding LUNA tokens on South Korea’s four largest stock exchanges is estimated at at least 170,000.

All national exchanges trading South Korean won have removed the Terraform-related asset from their listings or are in the process of doing so: Gopax closed all transactions related to LUNA and Terra KRT (KRT) on May 16, and Upbit, the market leader, ceased trading with LUNA on 20 May. The second largest platform on the market, Bithumbstops supporting LUNA on May 27th. Korbit and Coinone announced a halt to LUNA transactions on 10 May.

Commissioner Jeong Eun-bo of Financial Supervision Service (FSS), which answered questions about LUNA at a summit, said:

“We are concerned that confidence in the virtual asset market will suffer in this situation and that users will suffer. We will also hold in-depth discussions with foreign key authorities regarding the crypto-asset ecosystem in the near future.”

He added that “although the role of regulators is limited” in this case, it was “necessary to identify the nature of the damage and the cause of this incident in order to prevent recurrence.”

Newsis added that Financial Services Commission (FSC), the Financial Intelligence Unit and FSS “identified and verified” LUNA and Terraform white papers and investor data.

Jeong lamented the lack of “relevant laws and regulations” regarding what he called the “LUNA incident”.

Meanwhile, KBS stated that Koh Seung Beomthe chairman of the FSC, attended a plenary session of the National Assembly’s Political Committee earlier in the day, where he reportedly said:

“There is a limit to what we can do as the LUNA token is not a legal institution. But we are monitoring the situation closely.”

However, an anonymous official from one of the supervisory authorities drew a somewhat gloomier picture and said:

“We have requested data from national crypto exchanges to better understand where we are now before taking action.”

Politicians also appear to be confused: Speaking at a meeting of the National Assembly’s Political Committee earlier today, MP. Yoon Chang-hyeon claimed that “questions have been raised” about “the behavior of the stock exchanges during the crash”, where the stock exchanges apparently chose to take their own initiatives instead of making a joint decision.

According to Newspim, Yoon added that the National Assembly should hold a hearing in which Do Kwon should be present, which would allow deputies to decide what measures to take to protect investors in the future.

Elsewhere on Reddit, a user posted a copy of a complaint submitted to Singapore police. The form, completed by a Singaporean citizen, claims that LUNA is a “Ponzi scheme” and claims that 1,000 Singaporeans have been affected:

“It’s not normal for a token to be promoted as a safe and stable currency and sold to retail investors who know absolutely nothing about it. I have several examples of this Do Kwon and his MLM marketing network and how they spread this information about a 19% interest rate to lure Singaporeans into his fixed deposit scam. […] Do Kwon is still a billionaire according to the latest news. […] He currently lives in Singapore, so there is a chance that his assets will be frozen before he flees abroad. “

Terraform Labs was founded in Singapore in 2018.

However, some Redditors expressed doubts about the chances of success of the request:

“It’s a shame that people have lost so much money, but the ‘evidence’ the author shares seems to be links to various blogs without any credibility whatsoever.”

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