The developers of the Terra blockchain in the crosshairs of South Korean justice

Despite the launch of their new blockchain on Saturday, developers of the Earth ecosystem, including Do Kwon, should be held responsible in South Korea for the collapse of their ecosystem.

The Terra blockchain is in South Korea’s eyes. On May 28, Do Kwon announced the creation of the very first block of his new blockchain, called Terra, as his “recovery plan” was accepted by his community on Wednesday.

If this news gives the feeling of starting from scratch, it should not be forgotten that three weeks ago many individuals and investors saw their savings go up in smoke, following the collapse of the stablecoin terra usd (UST) and the cryptocurrency luna, which they were the essence of this ecosystem. These events are said to be closely scrutinized by the South Korean authorities.

According to Korean media JTBC, Seoul South District Procuratorate’s Financial Crimes and Securities Investigation Team summoned staff from Terraform Labs (the team of developers behind the creation of the Terra blockchain in 2018) to investigate the collapse of the ecosystem.

Among respondents, an employee who was involved in Terra’s development in 2019 admitted that there were doubts from the start about the cryptocurrency luna, launched in 2018.

“Even then, there was an internal warning that there could be a collapse at any moment, but Do Kwon forced the launch of the cryptocurrency,” said the latter, quoted by the Korean media. .

South Korean investigators are particularly interested in the fact that developers at Terraform Labs, as well as Do Kwon, have “overlooked the design flaws” of the moon and UST, and especially the Earth ecosystem, in advance.

The media also reported that 76 investors filed a lawsuit against Do Kwon and Terra co-founder Shin Hyun-seong, citing 6.7 billion won (€ 5 million) damages.

100,000 owners of the Luna cryptocurrency

The Terra blockchain is also in the sights of the South Korean financial regulator, which seeks to best protect investors from the collapse of the ecosystem.

On May 17, according to South Korean news agency Yonhap, the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) in South Korea initiated “emergency inspections” of cryptocurrency exchange platforms, asking them to share transaction information relating to the FSO and the moon.

Separately, the FSC’s Financial Intelligence Unit held a meeting on May 24 at the National Assembly to enact a cryptocurrency law and to protect investors, reports the JTBC.

The latter in particular called the case of the Terra blockchain a “vortex of death”, estimating the number of South Korean holders of the cryptocurrency Luna at 100,000 before its collapse.

The Authority underlined “the need to emphasize the principle of investor self-responsibility and to sensitize investors to their protection”.

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