South Korean police want the country’s crypto exchanges to freeze Luna Foundation Guard assets

South Korean police authorities have taken action to freeze Luna Foundation Guard (LFG) assets following the collapse of stablecoin Terra UST in early May. According to a report by a local news publication, the Seoul Metropolitan Police Agency has asked several exchanges to block Luna Foundation Guard from withdrawing corporate funds. The report adds that authorities filed the request on suspicion of misappropriation of company funds. However, exchanges are not required by law to do so, so it is unclear whether or not these measures will be implemented.

According to a report released by South Korea’s national broadcaster KBS, the Seoul Metropolitan Police Agency’s cybercrime investigation unit has asked several local exchanges to withhold funds held in wallets used by the Terra-affiliated nonprofit.

The move immediately follows Terra, which suffered the biggest crash in crypto history when its UST stablecoin lost its peg to the dollar, sending its fugitive token LUNA on a death spiral and about $40 billion (roughly $3,10,380 billion rupees) extinguished. value in a week.

LFG, the nonprofit formed to ensure UST’s stability, struggled to save UST by selling its Bitcoin holdings when the meltdown hit, but that wasn’t enough to cause UST to crash to prevent. LFG has since claimed that it spent more than 80,000 bitcoin worth $2.4 billion (about Rs. 18,622 billion) to defend the UST peg, leaving just 313 bitcoin on top of its holdings in UST, AVAX and some other digital assets.

Ever since Terra’s UST de-pegging event and the collapse of LUNA, Terra’s founder Do Kwon has also been under scrutiny. Reports surfaced last week that he had been fined $78 million (about Rs.6.04 billion) for tax evasion in South Korea, an accusation he later denied, claiming Terra had no outstanding tax debts in the country. South Korean police want the country’s crypto exchanges to freeze Luna Foundation Guard assets

Ryan Sederquist

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