South Korean authorities have discovered that Terraform Lab, the Do Kwon-led software development company, sold some tokens associated with LUNA Classic (LUNC) to its employees at half price before the assets were released to the market. 

According to local media from across the country, the digital assets, which include Mirror Tokens and Anchor Tokens, were sold to staff who worked as blockchain developers and product design managers. 

Living the Dream 

Prosecutors found that some of the employees who invested 2 million won ($2000) cashed out big from the investments as the assets surged after launch and followed the same trend as LUNC, which rose to $100 after a few years of launch. 

The Terraform Labs investors turned their 2 million won into 140 billion won worth $100 million.

Some employees spent the proceeds from their investments on luxury imported properties, including vehicles like Lamborghini. Part of the funds also went to expensive apartments. 

Authorities believe the assets were manipulated in favor of the employees by raising the price as much as possible before dumping the tokens in the market which caused other investors to make losses.

“It is not a normal investment performance, but it is possible that it was an ‘organizational fraud’ of the executives and employees, including CEO Kwon Do-Hyung,” said the prosecutors. 

Law enforcement is currently investigating the “preservation of additional collections before prosecution by identifying those suspected of being ‘criminal proceeds’ among the assets earned by the employees.”

Authorities Claim that Do Kwon Manipulated LUNC Price 

Meanwhile, the latest development comes a few days after prosecutors alleged that Do Kwon, who is currently wanted in the country, directly ordered an employee to manipulate the market price of LUNC. 

Authorities claimed they had obtained evidence of a “conversation history” on Messenger, which Kwon specifically requested for manipulation. 

Prosecutor Lee Do-Yoon, from the South Korean Prosecutor’s Office, officially confirmed the claim, noting that he was not allowed to disclose the entire contents of the evidence.

Recall that authorities have been working to understand the cause of the sudden collapse of Terra (LUNA), now the LUNC blockchain, in May. 

A few months ago, law enforcement froze $67 million in Bitcoin (BTC) belonging to LUNA Foundation Guard after the company tried to move the assets from two crypto exchanges, KuCoin and OKX. 

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