Korean authorities are making progress with the ongoing investigation of the collapse of TerraForm Labs.
New revelations have emerged about the ongoing investigation of the collapse of Terra ecosystem tokens, $LUNA and $UST.
According to a recent report, TerraForm Labs employees disclosed that prior to the launch of Terra tokens, the project’s founder Do Kwon was warned that the tokens would eventually collapse.
However, Kwon refused to heed these warnings and proceeded to launch the cryptocurrency. Kwon’s refusal to heed the warnings of developers who conducted a pilot experiment that failed, resulted in the loss of over $60 billion, with only a few investors escaping the crash.
“Even at that time, there was an insider warning that there could be a collapse at any time, but CEO Kwon Do-Hyeong forced the coin to be launched,” one of the employees disclosed during an investigation.
Terra Currently Under Investigation
It is worth noting that TerraForm Labs and its executives are undergoing serious investigations in South Korea. Korean authorities believe the collapse of Terra tokens has not been properly investigated and as such a series of efforts were launched toward that effect.
As reported, the Korean government relaunched its specialized crime unit to investigate the main cause of the Terra collapse.
Following the government’s quest to ascertain the cause of Terra’s collapse, a joint financial and security crime investigation unit was set up by South Korea’s prosecutors office.
The specialized crime unit interrogated all TerraForm Labs staff, especially those involved during the development of the project at its initial stage in 2019.
The employee continued that Kwon was warned against launching the project due to the high interest Terra proposed to pay investors of its Anchor Yield program.
“If you pay interest of several tens of percent to investors without a stable collateral or profit model, people may flock to you at the beginning. At a certain point in time, it has no choice but to collapse because it cannot handle interest payments and fluctuations in value,” the employee added.
Obsessed with his project, Kwon launched Terra still with the same model, which subsequently crushed and put many people and entities into severe losses.
Terra’s Compensation Plan Still Not Meeting Expectations
With Terra tokens collapsing, Kwon has set plans in motion to compensate investors, by creating a new chain and $LUNA tokens, as well as burning the excess supply of $UST.
However, these moves do not seem likely to make investors whole in earnest as the tokens are still trading beneath what was recorded last month.
At press time, $LUNA is trading around $8.45, while $UST is changing hands at $0.02
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Original Source :thecryptobasic.com
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