Terraform Labs Update: South Korean Police Move to Freeze Foundation’s Assets

The Terraform Labs debacle has taken on a new twist as South Korean law enforcement authorities are reportedly moving to seize the remaining assets of the Luna Foundation Guard (LFG).

Whole $LUNA thing was an actual exit scam. Build a whole ecosystem of dapps and attract developers, then just rug for 80K $BTC and watch the whole thing crash.

— Khal DROGON (@thedragonpilot) May 23, 2022

Since depegging from the US dollar, both UST and LUNA have collapsed in spectacular fashion, despite injections of capital and failed revival plans that were dead on arrival. With a class action lawsuit looming, things appear to be going from bad to worse for Terraform Labs and its formerly outspoken founder, Do Kwon.

The Saga Continues

According to a local report, law enforcement officials in South Korea are taking action to freeze assets tied to the non-profit group LFG (Luna Foundation Guard). The report suggests that the Seoul Metropolitan Police Agency has asked multiple exchanges to block LFG from withdrawing any corporate funds.

Police indicated that their interest was piqued upon hearing that LFG may have embezzled funds, however it is interesting to note that per the report, the exchanges have no obligation to comply with law enforcement officials’ request.

KBS reported that the Seoul Police Agency asked exchanges to prevent LFG from withdrawing any corporate funds. However the exchanges are not bound by law to do so; police said that they stepped in after indications that there were embezzled funds within LFG. LUNA saga continues

— Tajo Crypto (@TajoCrypto) May 23, 2022

Simultaneously, it was also reported that following the Terra ecosystem collapse, Korean legislators had been meeting with the five biggest crypto exchanges to establish the extent of loss and who should be held accountable.

We will request a quality investor protection policy to be implemented amongst exchanges.

Yoon Chang-hyeon, chairman, People Power Party’s Virtual Assets Special Committee, Facebook post

Worst Yet to Come for Terraform

A few exchanges have elected to delist LUNA, while others have placed an “investment warning” on the now virtually worthless token. From its high of close to US$120 it is now trading at US$0.0001626.

Although it’s still early days, current indications suggest that the worst is yet to come for Terraform Labs and its founders. After mocking detractors for being “poor”, it may ironically be Do Kwon who suffers that fate, or even worse.