- South Korea will penalize cryptocurrency exchanges based in the country for damages to LUNA investors.
- Authorities also urged crypto exchanges to freeze funds held by LUNA Foundation Guard.
- Sources say the police have found evidence suggesting LFG is guilty of embezzlement.
South Korea will be penalizing cryptocurrency exchanges based in the country over the collapse of LUNA and UST. According to various media sources, these exchanges will be liable for damages to LUNA investors.
In addition, the Seoul Police Cybercrime Investigation Unit has reached out to exchanges, urging them to freeze funds held by LUNA Foundation Guard (LFG). This happened after the authorities found out information that suggests LFG has embezzled funds.
However, cryptocurrency exchanges can choose not to heed the advice of the South Korean government since the law does not compel them to.
The above news occurred roughly a week since South Korea started investigating the LUNA fiasco. Since then, a lot of events happened. For instance, Terra creator Do Kwon liquidated the South Korean office of Terraform Labs.
Meanwhile, some accused Kwon of fraud, saying that they did not really use their bitcoin reserves and other assets to salvage LUNA and UST prices when they were crashing.
Kwon and the rest of LUNA Foundation Guard have yet to react to the recent accusations. However, they assured their hands are clean.
“Appreciate the thorough cross-examination,” said Kwon, “but we’ve never done anything shady and lived and breathed by what’s best for this community for the last five years.”
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