Saturday, January 28, 2023

‘Grim Reapers’ financial crimes unit revived to investigate Terra collapse


Legal troubles are mounting for the co-founder of failed Terra crypto mission Do Kwon because the South Korean authorities revives the dormant “Grim Reapers of Yeoui-do” to investigate Terra’s fall.

The particular investigative and prosecutorial group consists of members from numerous financial regulators, and is designed to prosecute securities fraud and unfair buying and selling schemes. Potentially in danger are co-founders Do Kwon and Shin Hyun-seong, together with core members of the Terra group. Yeoui-do is the financial heart of Seoul.

Korean information outlet SBS News confirmed on Wednesday that the Terra case could be the primary the resurrected Securities Crimes Joint Investigation Team would investigate. A consultant from the group informed SBS News that, “The Terra case caused severe damage to average citizens which led us to designate this as the first investigation.”

Reforming the dreaded investigative group could also be a political transfer by the brand new conservative President Yoon Seok-yeol, reversing the choice by the earlier liberal Moon Jae-in administration to disband it. However, the severity of the Terra state of affairs is illustrated by the very fact that it’s the first case the investigators will deal with in two years.

The group earned the moniker The Grim Reapers due to the high-profile circumstances it dealt with. One of the biggest circumstances the group dealt with was the $1.2 billion Lime Asset Management embezzlement scandal. The group was disbanded earlier than the investigation was full, in order that case is ready to be reopened.

Before being disbanded, the group racked up 346 arrests from 965 circumstances prosecuted from 2013 to 2020.

Terra (LUNA) is a layer-1 blockchain. Luna and the stablecoin Terra USD (UST) have been every among the many top ten cryptocurrencies by market cap till a dump of UST on May 8 sparked a death spiral that has led to billions in losses. On May 8, Terra had a market cap of $24.8 billion, however is now $959 million in accordance to CoinGecko.

Many locally maintain Kwon accountable for the collapse of the mission. In South Korea, a bunch of Terra traders can also be set to sue Kwon in civil courtroom for damages and in legal courtroom for fraud. They will even push for the courtroom to seize Kwon’s belongings.

As reported by Moonwha Ilbo (Culture Journal) on May 18, the authorized group concerned within the legal case might be prosecuting based mostly on provisions within the Capital Markets Act, which is used to regulate financial points of the crypto business however which can be replaced by crypto-specific laws.

The authorized group at LKB & Partners, the agency dealing with the case, have a private stake within the mission, as accomplice Kim Hyeon-kwon acknowledged to Moonwha Ilbo, “Some attorneys at this law firm were investors in Terra.”

A consultant from the legislation agency didn’t instantly reply to a request for remark.

Related: Analysts assess the aftermath of the Terra (LUNA) collapse | Cointelegraph interview

Kwon’s authorized troubles prolong past South Korea as a resident of Singapore filed suit against Kwon final week on behalf of at the least 1,000 different residents who invested within the Terra ecosystem.