Exchanges asked to freeze LFG related funds by South Korea Authorities
May 24, 2022 6:27 AM
South Korea crypto exchanges have been issued notices from police requesting the sequestering of finances related to the Luna Foundation Guard.
Authorities in Korea sent a request to the top crypto exchanges on 23rd of May, in the country to help finances from being withdrawn by LFG. notably, the Seoul Metropolitan Police Agency asked to ban the Luna Foundation Guard from taking any action. The police claim that suggestions have been plant that may link the association to embezzlement.
Nevertheless, this request isn't a demand and isn't enforceable by law. Each exchange can choose how they would like to respond, but it isn't yet known how they will respond.
The Terra-Luna algorithmic stablecoin (UST) crash, which reduced the value of the coin to nearly zero resulting to one of the biggest crash in crypto history, allowing Terra investors to loose a huge chunk of their portfolio overnight.
Several prominent Korean investors requested that Do Kwon, CEO of Terraform Labs, be probed and sued for the collapse of the UST stablecoin. This started the reanimation of the “ Grim Reaper,” a Korean Financial and Securities Crime Joint Investigation Team.
Korean lawmakers have gone as far as meeting with directors from each of these exchanges, including Upbit, Bithumb, Coinone, Korbit, and Gopax. Because they aren't needed to act, this meeting is probably a move to put pressure on the heads of these exchanges.
According to a report from Newspim, Yoon Chang-Hyeon, president of the People's Strength Virtual Means Special Committee, said on Facebook,"We'll check the exchange's investor protection measures."
It's reasonable to anticipate that the representatives from the exchanges will be held responsible, in some way, for the damage caused to investors by the LUNA crash, reported the outlet. Newspim also reported that the Korean National Assembly is taking the action to regulate discipline in this matter.
Although this sanctioned report joins the broader developing story, the request to the crypto exchanges and the Do Kwon disquisition aren't linked. The conduct by the National Assembly and the Korean authorities make it clear that Korea is willing to take the necessary way to get to the bottom of the Terra ecosystem collapse.