Terra is getting new bases every day after the accident. Now, Terra maker Do Kwon and Terraform Labs (TFL) have been directed by a judge to cooperate with the SEC investigation.
However, the investigation is not in relation to the current blockchain disaster. Instead, the SEC is investigating whether Terra’s tokens are illegal securities. This is similar to the recent investigations by Binance and the long-running lawsuit against Ripple.
Warrant issued against Do Kwon in 2021
According to a source at legal news site Law360, the SEC investigation began in September 2021, when the agency issued warrants on Kwon and TFL.
A judge said earlier this week that Do Kwon could not escape investigation. This is because TfL is a South Korean company that also has consumers in the United States.
The SEC is specifically looking at Terra’s Mirror Protocol, which allows a token exchange closely tied to the price of an actual stock. Last month a string of vulnerabilities rendered Mirror useless, taking $92 million out of the system.
Terra Staff Stole 80 Bitcoins?
The next turn of events is bitcoin theft. Earlier on Tuesday, the Seoul Metropolitan Police Agency detained a Terraform Labs employee on charges of stealing 80 bitcoins worth approximately $2.39 million.
When UST and LUNA prices fell in mid-May, TerraForm Labs exchanged a large number of crypto assets.
Unfortunately, it is uncertain whether Terra founder Do Kwon or other Terra employees were involved in the property theft. Terra and its employees are now being investigated by South Korean officials.
According to South Korea’s Yonhap news agency, a Terraform employee took 80 bitcoins. It cost about $2.39 million and it all happened in May between Terra’s UST and Luna crash.
Officials are currently probing the details of the incident. The employee appears to have manipulated the bitcoin reserves of the Luna Foundation Guard. These are the same reserves that will guarantee the integrity of the UST stablecoin.
Unfortunately, due to the involvement of international trade, obtaining warrants requires time.