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July 21, 2022

South Korean prosecutors raid offices tied to Luna amidst ongoing crypto crash

South Korean prosecutors have launched several raids against offices linked to defunct cryptocurrency Luna.

By Jake Mainwaring

South Korean prosecutors have raided several cryptocurrency exchanges in the search of evidence of illegal activities as the crypto crash continues.

“A total of 15 places, including cryptocurrency exchanges and related offices, were searched on Wednesday for proof of allegations,” a spokesperson told Reuters.

The raids came after investors accused Korean developers Do Kwon and Daniel Shin, co-founders of blockchain platform Terraform Labs, of fraud.

The platform is affiliated with Luna and its sister token TerraUSD, a stablecoin that imploded in May, leaving investors with tens of billions of dollars out of pocket.

Unusual circumstances surrounding the collapse motivated investors to submit allegations of fraud against the company. The accusations sparked an investigation, which has resulted in law enforcement raids and several Luna employees have been added to a no-fly list.

Luna raid part of wider crypto crash

The raids against the Luna offices come as digital assets continue to face a battering of bad news.

While the value of bitcoin has increased slightly in recent weeks, its current $23,000 valuation is only a fraction of its all-time high of around $69,000 recorded in November 2021.

This week the industry took another beating when Tesla was revealed to have dumped 75% of its bitcoin holdings. Its Tesla now has digital assets of about $128m, The Verge reported.

The electronic car company is owned by the world’s richest man and known crypto evangelist Elon Musk. His tweets have famously shaved and added billions of dollars to bitcoin’s value in the past.

Tesla famously bought $1.5bn worth of bitcoin in February 2021. One month later, the Musk company announced plans to accept bitcoin as a payment. However, it then backtracked on the decision in may.

Musk cited concerns over the environmental impact of bitcoin as a reason for it. Although, as we reported at the time, there is little evidence that Tesla ditching bitcoin payment would have any tangible impact on the environment when you consider the carbon footprint derived from producing the cars.

Elsewhere, crypto exchange Celsius filed for bankruptcy in July.

GlobalData is the parent company of Electronic Payments International and its sister publications.

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