Korean Police Ask Crypto Exchanges to Freeze Luna Foundation Assets

According to reports, the South Korean police launched an investigation into embezzlement of a Terraform Labs employee. The police requested that crypto exchanges block funds from the Luna Foundation Guard to prevent money transfers.

Asset Freeze and Investigation into Embezzlement

According to local media, the Seoul Metropolitan Police Agency’s Cybercrime Investigation Unit announced Monday it had launched an investigation into possible embezzlement of a Terraform Labs employee.

Chosun quoted a Seoul Metropolitan Police Agency official as saying:

According to our sources, we have information about a Terraform Labs employee who is suspected of embezzling corporate money.

Police received reports about the embezzlement of funds in the middle month and are currently investigating the matter. The police will investigate the allegations of embezzlement by Terraform Labs (LFG) and Luna Foundation Guard (LFG).

Police explained that evidence has been presented that funds stolen from the Luna Foundation Guard’s accounts. To prevent funds from being withdrawn from crypto exchanges, the cybercrime unit requested that major cryptocurrency exchanges like Upbit and Bithumb “urgently” lock the accounts of the Luna Foundation Guard.

The police’s request to freeze the crypto exchange is not an obligatory matter under Korean laws and regulations. It is not known if the freeze requests were fulfilled or if the publication was sent.

After UST lost its peg with the U.S. Dollar, cryptocurrency terra and stablecoin terrausd collapsed earlier in the month.

The Korean government opened an emergency investigation into both coins, and representatives from the country’s top crypto-exchanges met with them to discuss ways to prevent similar events.

Last week, a group of victims filed a lawsuit against Kwon Dohyung (aka Do Kwon), Terraform Labs CEO. The suit was brought by the Seoul Southern District Prosecutors Office on charges of violating the Act on the Regulating of Similar Receipts (fraud).

Do Kwon also dissolution Terraform Labs Korea just days before the collapses of LUNA/UST. Kwon denied any foul play. He claimed that the timing of the collapse was “coincidental.” Also, he claims that his company doesn’t owe taxes to the Korean government.