South Korean Prosecutors Raid Exchanges Amid Luna Probe

• Prosecutors on Monday raided the homes and offices of four cryptocurrency exchanges.
• A total of 15 places, including cryptocurrency exchanges and related offices, were searched.
• The two men, Do Kwon and Daniel Shin have denied any wrong doing.

South Korean authorities carried out search and seizure operations at local cryptocurrency exchanges, as well as offices that are affiliated with the collapse of cryptocurrency Luna in May, seeking proof of illegal activity. The prosecutors on Monday raided the homes and offices of four cryptocurrency exchanges as part of an investigation into alleged fraud by the co-founders of blockchain platform Terraform labs.

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Spokespeople for Upbit, Bithumb, and Gopax confirmed that raids took place in the evening at their offices and that prosecutors seized transaction records.

“A total of 15 places, including cryptocurrency exchanges and related offices, were searched for proof of allegations,” a spokesperson told the Reuters news agency on Thursday, without elaborating. Investors have accused Korean developers Do Kwon and Daniel Shin, creators of the blockchain platform Terraform Labs, which is connected to the failed cryptocurrency, of fraud.

A News Agency reported earlier that Chai Corp., one of the world’s most popular payment apps, was among those being investigated, along with local crypto exchanges such as Upbit, Bithumb, and Coinone, as well as unidentified venture capital funds that invested in the Terra blockchain project.

The two men, Do Kwon and Daniel Shin have denied any wrongdoing, saying they are the victims of a “witch hunt”. Luna, which was launched in February this year, raised nearly $30 million from investors before it collapsed in May, leading to protests by angry investors.

The prosecutors’ raid came a day after South Korea’s financial regulator, the Financial Services Commission (FSC), issued a warning to local investors about the risks of investing in initial coin offerings (ICOs).

“The FSC cautions that ICOs are highly speculative investments where investors can easily suffer substantial losses,” the regulator said in a statement on Wednesday. Luna’s value fell to practically zero in May following the collapse of stablecoin Terra USD, which had been pegged to the US dollar and was exchangeable with Luna.

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