According to a former Terraform Labs employee, CEO Do Kwon was informed of the possibility of the Terra ecosystem’s tokens (UST) collapsing. Kwon, on the other hand, is said to have disregarded the warnings and gone ahead with the project anyhow.
Prosecutors are looking into whether Terra has any ties to market manipulation, according to JTBC, a South Korean television network. Ex-Terraform Labs personnel who have been active in the business since 2019 have been interviewed as part of this.
Following that, one of the employees said that Do Kwon had been informed of the weaknesses in the algorithmic stablecoin method on many occasions. Insider sources had informed Kwon that UST’s peg to the US Dollar would eventually fail and collapse, but the CEO opted to go ahead with the project nevertheless, according to the unidentified source.
South Korean cryptocurrency exchanges are being scrutinised
Authorities in South Korea are looking into Kwon’s role in the allegations of possible internal price manipulation leading up to the tragedy. Prosecutors are also investigating South Korea’s native cryptocurrency trading platforms to see if they went through a thorough vetting process before listing UST and LUNA.
“About 200,000 investors in South Korea are said to have invested in TerraUSD and Luna,” according to local press. As a result, the Financial Services Commission (FSC) and the Financial Supervisory Service (FSS) have asked local cryptocurrency exchange operators to “share information on transactions linked to TerraUSD and Luna, including the volumes of their trading, their closing prices, and the number of relevant investors.”