As the Terra LUNA/UST saga unfolds, it’s looking more and more like Terra founder Do Kwon will be held accountable for some of the damage done by the LUNA’s token price collapse and the UST stablecoin’s depegging. We’re used to founders rug pulling, or generally scamming investors, and getting away with it. Part of this is due to previous crypto scammers creating their companies in lenient locations, or remaining entirely anonymous. Do Kwon did not follow these guidelines.
Do Kwon is a resident of South Korea, and it is becoming increasingly obvious that South Korea wants to make it clear they will not stand for this type of behavior. News came out this week that police reports were being filed in Singapore about the LUNA/UST collapse–which the internet was quick to laugh at. The status quo in crypto has been that there are no consequences for most incidences like this.
Recently though, there have been multiple stories of South Korea taking action against Do Kwon, and doing further investigation. Starting with news that there have been requests from one of South Korea’s political parties for hearings on Terra’s collapse, calling for Do Kwon to testify. On Thursday, it came out that Terraform labs, the team behind UST and LUNA, was fined $78M for tax evasion, and a special investigative group was put on the case.
Now there are reports that Do Kwon had filed to dissolve Terraform labs 5 days before the massive collapse occurred. With this final report, prosecutors in South Korea have announced they’re investigating the company and Do Kwon, and intend to bring charges.