Terraform Labs, the software development company behind the creation of the Terra (LUNA) ecosystem, is under investigation by the Singapore Police regarding the fall of its algorithmic stablecoin TerraUST in 2022, Bloomberg reported Monday, citing an email statement.
The technology company was founded by South Korean business entrepreneur Do Kwon, who the prosecutors now want in his home country after he disappeared last year following the Terra (LUNA) fiasco in May.
Where is Do Kwon?
According to the Blomberg report, police have launched a probe into the company, and “inquiries” are currently ongoing to unravel the mysteries behind the sudden collapse of the algorithmic stablecoin and its utility token LUNA.
Police further disclosed that the wanted Terra co-founder’s location remains unknown as he is not in the city-state.
Kwon and some of the company’s executives lived in South Korea before secretly moving to Singapore after the Terra ecosystem tragedy. However, he later fled the country to an unknown location.
At the time, the Singapore police pledged to utilize all foreign and local resources to find him. Sadly, both the Singapore and South Korean authorities are yet to find Kwon, who claims he is not on the run from any law enforcement.
SEC Sues TerraForm Labs for Fraud
While the Singapore police had just begun investigating the firm, the United States Securities and Exchange Commission (SEC) indicted the company alongside Kwon for operating a multi-billion dollar crypto securities fraud.
The suit filed in U.S. federal court for the Southern District of New York alleged that the company and its founder misled investors about the stability of the algorithmic stablecoin, which was designed to maintain its 1:1 value to the U.S. dollar constantly.
“We allege that Terraform and Do Kwon failed to provide the public with full, fair, and truthful disclosure as required for a host of crypto asset securities, most notably for LUNA and Terra USD. We also allege that they committed fraud by repeating false and misleading statements to build trust before causing devastating losses to investors,” said SEC Chair Gary Gensler.
Meanwhile, the collapse of the Terra blockchain last year unleashed a wave of bankruptcies in the crypto industry as many companies such as Three Arrows Capital (3AC), Voyager Digital, and Celsius Network were significantly affected by the collapse.
