The assets of seven parties with connections to the Terra Luna ecosystem may be frozen, according to a Dec. 20, 2022 decision by the Seoul Southern District court in South Korea.
A local Korean newspaper reports that three Terra Luna investors and four Terraform Labs personnel who sold LUNA at a healthy profit before the cryptocurrency was made available to the general public will have their earnings frozen at about $93 million. Additionally, prosecutors believe that the Terra Luna cohort actively sought the issue of LUNA despite the fact that cryptocurrencies are not recognized as legal payment methods in Korea.
The majority of the LUNA revenues were used by Kernel Labs CEO Kim Amugae to purchase multiple homes in Seoul, the capital of South Korea, while Mr. Choi, the previous CEO, received $31 million from sales of Terra Luna. Initially, Kernel Labs had given Terraform Labs crucial technologies.
A little over a month ago, Korean authorities made their previous seizure, freezing Terraform co-founder Daniel Shin's assets, which were valued about $108 million. Authorities believe that before Terraform Labs made LUNA available to the public, Shin, like the other seven defendants, benefited personally from its peak. In 2018, CEO Do Kwon and Shin began promoting LUNA publicly.
Probability of Do Kwon's Extradition From Serbia
Since Korean prosecutors requested that Interpol issue a red notice for his provisional arrest, CEO Kwon has been the target of an international search. The Terra Luna leader will likely be extradited to South Korea if he is discovered and taken into custody. He is accused of committing capital markets legislation violations and financial crimes there.
According to Singaporean police, Kwon left the city-state in April 2022. He was afterwards said to have lived in Europe and Dubai.
A local Korean newspaper said earlier this month that after locating Kwon in Serbia, prosecutors pleaded for the government's assistance. Despite not having an extradition agreement, Serbia and South Korea have worked together in the past under the European Convention on Extradition.
Following the collapse of Terraform's stablecoin TerraUSD (UST) in May 2022, the search for Kwon began. A stablecoin is a form of cryptocurrency that uses asset reserves or an algorithm to keep its value at $1. Through an algorithmic link with sister currency LUNA, UST maintained its peg to the dollar.
After submitting a patent application with the Korean Intellectual Property Office in August 2018, Kernel Labs apparently created the technology to keep UST's peg.
After many significant exchanges on Curve, a decentralized financial system that allowed users to swap stablecoins, the value of UST dropped to about 90 cents in May. An individual or collection of individuals depleted Curve of UST liquidity, precipitating a precipitous decline in price. People began withdrawing their UST through cryptocurrency services, such as the Terra Luna bank, Anchor. The algorithm then began producing increasingly more LUNA to aid in restoring UST's dollar peg. With additional LUNA entering the market, its value plummeted, leaving owners with only a small portion of their initial investment.