The law firm of LKB & Partners has decided to take legal action against Terraform Labs founder and CEO Do Kwon for his role in the stunning collapse of TerraUSD (UST) last week. Korean media announced the news on Wednesday.
LKB plans on taking legal action against Kwon, a Korean national on behalf of investors who lost money in the current UST collapse. They will be contacting the Seoul Metropolitan Police Agency as per an article found in Munhwa Ilbo daily newspaper. It is not yet clear how many of LKB’s workers will join the action, but it seems that several may do so because they lost money in the UST collapse.
Kim Hyeon-Kwon, a partner at LKB says that their law firm has connected investors who were affected by the collapse as well. In addition, he says they will lodge a claim against Kwon with the Seoul Metropolitan Police Agency’s Financial Investigation Unit.
According to the statement, in addition to submitting a police complaint, the company LKB plans to file a provisional attachment order of Kwon’s properties in the Public Prosecutors’ Office for Seoul Southern District.
LKB is also planning to sue Daniel Shin, another co-founder of the company Terra. This news was reported by the Korean media outlet Yonhap.
Last week, the UST algorithmic stablecoin has fallen dramatically, even below its goal price of $1. The fall of Luna has been equally as severe and it’s now only worth a fraction of its original value.
The recent collapse of UST and Luna resulted in tens, if not hundreds or thousands of billions of dollars lost by traders and investors alike.
In response to recent news that the Financial Services Commission (FSC) and Financial Supervisory Service(FSS), two agencies in charge of regulating financial markets here have started emergency checks on local cryptocurrency exchanges.
The government wants better protection when it comes down to protecting their citizens’ assets so they’re taking steps towards making sure nobody gets screwed over by bad actors or errors within these firms who provide services related thereto.
Korean politicians are scrambling to learn more about the cause of UST’s collapse and how it can be safeguarded for investors. Yun Chang-Hyun, a Korean politician, has called for an emergency meeting of the parliament’s finance committee to learn more about UST and how they can protect investors from further problems.
The legal team at Terraform is not enough to handle all of the UST concerns. In fact, according to multiple sources, the company’s in-house legal staff have left following the UST debacle. They’ve hired outside counsel to help with this issue for advice on what steps should be taken next!
In the meantime, Terraform is working to improve this problem. Kwon’s proposal has not secured enough support from within the community to move forward. He proposed forking terra in order to build a new blockchain.
Korea’s Authorities Launched A Probe Into The TerraUSD Scandal.
The crash of the LUNA price has generated a lot of attention in cryptocurrency markets. The South Korean financial regulators are currently investigating what happened, and it’s likely that this will have an effect on other coins as well. The goal is to create a more stablecoin-friendly regulatory environment for investors while also protecting their interests.
The latest data from local sources estimate that 280,000 Korean traders have invested in TerraUSD and LUNA.
The investigation will find out if these companies are in compliance with financial regulations and what happened to cause the value lost. They might also reach some conclusions about who is responsible for this mess and what to do so that it doesn’t happen again.