Following the massive fall of TerraUSD and Luna, the National Tax Service filed a lawsuit against the CEO of Terra Labs.
According to the official announcement, the co-founder of Terra (Luna) Do Kwon received a fine of 100 billion won or $78 million for avoiding taxes from South Korea’s National Tax Service.
The investigators revealed that Terraform Labs transferred LUNA from its Singapore-based corporation to the LFG in order to make up for the losses of the anchor protocol.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is a DAO in Crypto? (Animated Explanation)
Even though Luna Financial Guard and Terraform Labs are located in Singapore, South Korean tax officials suggested that they are considered part of the local taxes based on the "place of actual management."
According to the source, Kwon did not approve of how cryptocurrency taxes were handled in the country and planned to liquidate Terra's domestic operations right before the catastrophic LUNA meltdown. It was also stated that LFG may face an extra tax on Bitcoin that was bought and sold.
In fact, Terraform Labs was firstly investigated last year due to a suspicion of avoiding income and corporate tax.
In other news, on May 12, Kwon’s Terra (LUNA) and TerraUSD (UST) crashed significantly. However, Do Kwon reassured crypto traders that Terra Labs has a plan to save Terra. The CEO implied that the minting capacity will be increased from $300 million up to $1.2 billion.
On top of that, earlier this year, the Commodity Futures Trading Commission issued a $1.4 million fine on the crypto prediction platform Polymarket.