South Korean police request exchanges freeze LFG related funds

South Korean police request exchanges freeze LFG related funds

Police have issued notices to South Korean crypto exchanges requesting sequestration of funds associated with the Luna Foundation Guard.

Korean authorities requested that funds not be withdrawn from crypto exchanges on May 23, 2022. The Seoul Metropolitan Police Agency requested that the Luna Foundation Guard be stopped from taking any action. According to the police, clues may have been discovered that could link the organization with embezzlement.

Investor portfolios were wiped out overnight by the Luna/Terra algorithmic stabilitycoin crash that reduced the coin’s value by more than 99%.

This request is not binding and does not constitute a demand. Each exchange has the option of responding in their own way, but it is still unknown how they will respond.

Several prominent Korean investors demanded that Do Kwon (CEO of Terraform Labs) be investigated for the collapse and prosecution of the UST stablecoin. The “Grim Reaper,” an investigation team that investigates Korean financial and securities crimes, was revived.

Korean legislators have met with executives from all of these exchanges including Upbit and Bithumb, Coinones, Korbit, Korbit, Korbit, Gopax, and Coinones. This meeting is unlikely to be a push to get the heads of these exchanges to comply since they are not required.

Newspim reports that Yoon Chang-Hyeon (chairman of the People’s Strength Virtual Assets Special Committee) stated on Facebook, “We’ll check the exchange’s investor safety measures.”

Related: Huobi Global cofounder says Terra crash is not a threat to the wider crypto ecosystem

According to the outlet, it is reasonable to assume that representatives of the exchanges will be held responsible for any damage done to investors by the LUNA fall. Newspim reported that the Korean National Assembly has taken the initiative to regulate the punishment in this area.

Two exchanges had already posted warnings on their websites. Coinone had already halted trades of LUNA as at May 11th and Binance had also stopped spot trading.

This official report is part of the wider developing story. However, the Do Kwon investigation and the request for crypto exchanges are not connected. Korea’s actions and those of the Korean authorities show that it is ready to make the necessary efforts to end the Terra ecosystem collapse.

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