South Korean prosecutors have prohibited current and former Terraform Labs employees from leaving the country. Bloomberg reported earlier today, citing an official with the prosecutor’s office in Seoul. The travel restrictions seek to ensure the employees are readily available for questioning.
The official, however, failed to disclose the number of Terraform employees that have received travel restrictions. Additionally, the source did not share details about the status of the investigation, which started last month. The probe seeks to determine whether Terraform Lab and its employees intentionally defrauded investors.
Among the people that the travel ban is targeting is Daniel Hong, a former Terraform Labs employee.
Hong revealed this news through a tweet, saying,
— Daniel Hong 🪄 (@unifiedh) June 20, 2022
Hong added the South Korean prosecution did not notify him about the ban. Upon inquiring, he claims the prosecution said it avoids informing people about travel bans to prevent them from destroying evidence or fleeing the country beforehand.
Bashing this approach, Hong said it is unacceptable for South Korea to treat people like potential criminals. According to him, such treatment might force Terraform Labs employees to change their minds about cooperating with the authorities.
Terraform Labs Woes Continue
This ban indicates South Korean prosecutors are digging deeper into the collapse of the TerraUSD (UST) stablecoin. The stablecoin’s debacle resulted in the loss of over $40 billion in user funds. As a result, investors have filed complaints against the company in different jurisdictions.
The first lawsuit came from South Korean law firm LKB & Partners, which accused Terraform Labs CEO Do Kwon of fraud. Apart from South Korea, Terraform Labs and Do Kwon are facing a proposed class-action lawsuit in California. The charges against the firm and its CEO include racketeering, selling unregistered securities, and misleading investors.
Meanwhile, Terraform Labs’ tokens continue performing deplorably even after attempts to revive them. At the time of writing, Terra Classic (LUNC) – formerly Terra (LUNA) – is trading at $0.0000597. This price represents a 100% drop from the token’s April 5, 2022, all-time high of $119.18.
On the other hand, TerraClassicUSD (USTC) – formerly TerraUSD (UST) – is changing hands at $0.008505. For a stablecoin that should maintain a 1:1 peg to the US dollar, USTC is down over 99%.