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Korean Police Want LUNA Foundation Guard Funds Frozen



Korean Police Want LUNA Foundation Guard Funds Freezed
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The Cybercrime Investigation Unit of the Seoul Metropolitan Police has taken measures to freeze all holdings of the Luna Foundation Guard (LFG). Korean police believe that embezzled funds may have entered the Luna Foundation Guard’s treasury. 

Luna Foundation Guard Under Korean Police Investigation 

While the UST and LUNA saga continues to prevail, Korean Police have sent requests to several crypto exchanges to freeze LFG’s exchange accounts. This is to hinder the withdrawal of assets from the foundation’s accounts. 

The Luna Foundation Guard (LFG) is a non-profit entity established with the primary task of ensuring the stability of TerraUSD (UST). During the period of UST’s depegging, the foundation sold its BTC holdings in a bid to save TerraUSD from crashing.

However, that alone could not save UST as the supposed stablecoin became unstable, losing its parity to $1 and falling as low as $0.1. LFG then noted that about 80,000 Bitcoin were sold, leaving only 313 Bitcoin in their account, alongside holdings in UST, AVAX, and other assets. 

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Per the announcement by KBS, the motion to freeze LFG’s exchange accounts stem from available clues revealing a possible association between the foundation and certain unstated embezzled funds. 

Noteworthy is that this police notice sent to crypto exchanges to freeze and hinder withdrawals from LFG accounts is not backed by law. Hence, it is uncertain whether these exchanges will act as demanded or otherwise. 

To further pressure these exchanges to comply with the investigation process, Korean ruling party summoned five major local exchanges including Bithumb, Upbit, Coinone, Gopax, and Korbit. According to reports, the Korea National Assembly is expected to hold these exchanges responsible for investor protection in relation to the Luna and UST incident.

Remember that there is a current lawsuit on investment fraud filed against Terraform Labs and its CEO by investors. Per the news, the police’s request for a freeze is separate from this lawsuit.

See Also: Ethereum Blockchain Draws Closer to Completing its Largest Protocol Change in History: The Merge is Happening Soon

Terra Woes Continue

May 2022 has been a nightmare for UST holders and Luna investors. Following the unusual collapse of the Terra ecosystem coupled with the dissolution of the company’s offices days before the crash, various speculations have been aired by the crypto community. 

While some claimed the incident was an attack on Luna, some suspect a planned insider foul play. This can be seen in a series of tweets made by a certain Twitter user, FatMan.

In his tweet, he implicates Do Kwon, Jump Capital, and its president, Kanav Kariya, as well as the founder of FTX on shady insider deals. FatMan further noted that he has proof revealing the manipulations and shady insider deals that gave rise to the $40 billion wipeouts during the Luna crisis. 

Meanwhile, legal troubles are increasing for Terraform Labs. Rekt investors have filed complaints against Terraform Labs with the Seoul Southern District Prosecutors Office on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (investment fraud) and the Act on the Regulation of Similar Receipts.

A major South Korean law firm, LKB & Partners, is also suing Do Kwon and co-founder Daniel Shin on behalf of five investors. 

Similarly, renowned Korean investors have pressed buttons, demanding the investigation of Terraform Labs and suing CEO Do Kwon for UST’s crash. 

In response, the Korean government has recalled an inactive Financial and Securities Crime Joint Investigation Team for an emergency investigation of Terraform Labs. This then shows commitment on the part of the Korean government toward solving this Luna’s complicated enigma.  

Final Words

Whereas measures are being taken to unravel the hidden truths surrounding the crash of Terra Luna, this incident teaches us great lessons. Investors should learn to always apply risk management measures and ensure proper research before investing. Also, a popular crypto maxim says, invest what you can afford to lose.

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Onyeka is a multiple google ranked content writer. Loves to cover stories on Blockchain and Cryptocurrency and write in a way that is captivating and understandable.

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