South Korea Tells Terraform Staff to Stay in Country, Indicating Investigation Ramp-Up

The South Korean government has ordered current and former staff of Terraform Labs to stay in the country, Bloomberg reported Tuesday (June 21). The move is likely is an indication the government is ramping up its probe into the collapse of the TerraUSD stablecoin.

“Officials linked to the stablecoin’s collapse” have been told to stay in the country, a representative of a prosecutor’s office in Seoul said in the report, adding: “Departure bans are normally imposed to have them included for questioning.”

Yonhap News, which attributed its report to “legal sources,” reported that 15 people, including developers for a lending system call Anchor, are covered under the travel ban, the report stated. Also, Daniel Hong, a former Terraform developer, tweeted: “Stop asking me why i couldn’t make it to NYC frens, this is why: the Korean government imposed an exit ban for all ex-@terra money employees today.” He included in the tweet a copy of the government no-travel notice.

stop asking me why i couldn’t make it to NYC frens, this is why: the Korean government imposed an exit ban for all ex-@terra_money employees today pic.twitter.com/5Jds99ZNwQ

— Daniel Hong (@unifiedh) June 20, 2022

Additionally, South Korean news station YTN reported that government officials have moved to revoke the South Korean passport of Terraform Co-Founder Do Kwon, who may live in Singapore now, according to the report. He could be required by South Korean law to return to the country to turn in his passport if it is revoked.

The U.S. Securities and Exchange Commission (SEC) is also investigating the collapse of TerraUSD — particularly the way the digital asset was marketed.

Read more: SEC Investigates TerraUSD Marketing

Both Terraform and Kwon had already been facing scrutiny from the SEC over the Mirror Protocol, another crypto project letting people trade digital assets tracking the price of U.S. stocks. Neither Terraform nor Kwon have been accused of wrongdoing in that case.

The collapse of TerraUSD in May destroyed about $45 billion in market value. TerraUSD blew up after its value dropped below $1, prompting a major sell-off.

See more: $45B Stablecoin Rout Confirms Worst Fears about Crypto’s Need for Reserves

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