The prosecutors of South Korea have obtained evidence that Terraform Labs (TFL) CEO Do Kwon manipulated the price of LUNA. This was reported by Korean Broadcasting System, citing a representative of the supervisory agency.
According to him, authorities have at their disposal correspondence between Kwon and a certain employee.
“I can’t disclose details, but it was a history of conversations [in a messaging app], in which the CEO explicitly ordered price manipulation,” the source said.
According to Korean Broadcasting System, a representative for Kwon refuted these allegations. The media also notes that the head of TFL lives somewhere in Europe.
By late March, the Terra ecosystem’s native token price breached the $107 mark. LUNA’s rise was accompanied by a surge in trading volume. This occurred amid active Bitcoin purchases by the non-profit Luna Foundation Guard to back the stability of the algorithmic stablecoin TerraUSD (UST).
On May 8, UST lost its peg to the US dollar after asset outflows from the Anchor protocol as deposit yields dropped to 17.87%.
On May 10, the asset’s price fell below $0.62. The decline continued on May 11, after which the LUNA cryptocurrency used to mint UST collapsed to $0.30.
After the collapse, South Korea’s financial regulators held an emergency meeting to assess the incident’s consequences. According to media reports, local authorities began an investigation into Terraform Labs employees as part of the investigation.
Earlier, in September, an arrest warrant was issued for Do Kwon and five other Terraform Labs employees on charges including violations of capital markets laws.
Thereafter, the prosecution asked the Ministry of Foreign Affairs to revoke the passports of those named. The ministry granted the police request and ordered Kwon to return his passport within 14 days.
The authorities also asked Interpol to begin a search and authorize the arrest of the company’s co-founder. Media reported the issuance by the international police organization of a “red notice” for Kwon. Information on the site does not confirm this.
Kwon denied the charges against him and that he is “on the run”. However, he refused to disclose his country of residence.
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