Terraform Labs, the dad or mum firm behind the collapsed Terra ecosystem, is presently beneath a number of investigations from the South Korean authorities.

The most recent investigation revolves across the alleged embezzlement of Bitcoin (BTC) from the corporate’s treasury. According to a report revealed in an area each day, the Seoul Metropolitan Police Company acquired an intelligence tip final month informing them of potential embezzlement of BTC by one of many workers of the agency.

The police acknowledged that the investigation into the alleged embezzlement of BTC from the corporate’s treasury had no direct reference to tainted co-founder Do Kwon, and they’re investigating particular person embezzlement prices at this level.

Authorities managed to freeze the stolen funds with the assistance of a crypto change till the investigation is full. Nonetheless, the quantity of the stolen funds hasn’t been disclosed.

The Luna Basis Guard (LFG), a fund arrange by the corporate that held over $3 billion in Bitcoin reserves, grew to become the main target of curiosity within the aftermath of the collapse. The BTC fund was used to assist stability the algorithmic stablecoin TerraUSD Basic (USTC). The agency claimed all its BTC reserves have been utilized in a futile try and stabilize USTC.

In a current interview with the Monetary Occasions, Terraform Labs co-founder Daniel Shin denied any allegations of malpractice or fraud. He stated:

“There was no intention of deception as we simply needed to innovate the fee settlement system with blockchain expertise.”

South Korean authorities have launched a full-scale investigation into the current collapse of the Terra ecosystem and the function of Terraforms Labs workers and co-founder Do Kwon.

Associated: Chinese language state media alerts tighter crypto rules in Terra aftermath

The primary investigation started within the second week of Might after 81 buyers collectively filed two complaints towards the agency for deceiving buyers with a flawed token.

As Cointelegraph reported earlier, South Korea’s feared investigative and prosecutorial staff referred to as Grim Reapers of Yeouido was reformed by the brand new president to look into Terraform Labs. Later, the South Korean Conservative Occasion requested a parliamentary listening to on the matter.

Within the final week of Might, Korean authorities subpoenaed all Terraform Labs workers to research any inner function in market manipulation. Authorities additionally requested crypto exchanges to freeze funds related to the LFG.

The nationwide tax company of South Korea fined Terraform Labs $78 million on tax evasion prices, which got here to gentle within the aftermath of a number of investigations into the agency post-collapse.

The collapse of the $40 billion Terra ecosystem didn’t simply invite authorized troubles for the creators of the venture, it has additionally pressured regulators across the globe to rethink their crypto regulatory technique. Korea shaped a brand new crypto oversight committee, whereas Japan handed new rules allowing solely belief corporations and banks to concern stablecoin.