The ramifications of the Terra (LUNA) case continue to spread beyond the cryptocurrency industry. In South Korea, authorities reportedly want access to the project’s contributors. As a result, Terra employees and developers can no longer leave the country, according to several local reports.
Terra developers forced to stay in South Korea
As a reminder, South Korea is particularly associated with Terra, first of all because Do Kwon, the CEO and founder of Terraform Labs, is himself Korean. Moreover, a recent investigation by local tax authorities concluded that the company is indeed Korean, even though it is officially registered in Singapore.
As a result, Terraform Labs and its associates are under particular scrutiny by the Korean authorities, who seem to want to make an example of the Terra case. Regulators had already launched an emergency inspection of local platforms last May. And as the legal setbacks follow one another for Do Kwon and his associates, it seems that they are now targeted.
This is what the local media JBTC reports. It explains that the financial crime investigation squad of South Korea has placed an exit ban on the former employees and developers who participated in the development of the Terra blockchain. These are therefore de facto forced to stay in Korea indefinitely.
A discreet decision by the authorities
The news was directly confirmed by the developer Daniel Hong, who explained on Twitter that all former employees of Terraform Labs were affected.
According to Hong, those affected were not directly notified of the decision. According to Hong, those affected were not directly notified of the decision, and the people in charge of the investigation purposely avoided notifying them so that they would not be tempted to destroy evidence or leave the country before they were asked to testify.
Hong expressed his anger on Twitter, saying that he and his colleagues were being treated as “potential criminals. He further opined that this could have the opposite effect of what was intended, with former Terra actors now refusing to cooperate.
The Terra case continues to shake up the cryptocurrency world
The Terra affair created an earthquake last month, which transmitted to very broad sectors of cryptocurrencies, also contributing to the considerable drop in prices that we are witnessing in recent weeks. Reactions such as the one from the Korean authorities in any case show that regulators want to set a precedent with Terra.
Late last week, it was reported that a class action lawsuit had been filed against Do Kwon in the US. More broadly, regulators have held up Terra’s UST as an example of how dangerous stablecoins can be… Without differentiating algorithmic stablecoins from others.
So these are certainly stirring times for cryptocurrencies, and decentralized finance (DeFi) in particular. It is fairly easy to predict that this will trigger even stricter regulations for the sector.
