Investors who suffered losses from the collapse of the Korean cryptocurrency Luna and TerraUSD (UST) have sued Do-Hyung Kwon, CEO of issuer Terraform Labs.
LKB (LKB) & Partners, a law firm that represents investors, today (19th), CEO Kwon, co-founder of Terraform Labs and founder of social commerce Timon, and Terraform Labs corporation aggravated certain economic crimes to the Seoul Southern District Prosecutors' Office According to the Punishment Act, they have filed a complaint and accusation on charges of violating the Act on the Regulation of Fraud and Similar Receiving Acts.
LKB said, "The act of CEO Kwon, etc. designing and issuing Luna and UST to attract investors while not notifying the algorithm design errors and flaws properly. do,” he claimed.
He explained the purpose of the complaint and accusation, saying, "The establishment of the 'Anchor Protocol' to attract new investors, guaranteeing an unsustainable 19.4% annual interest rate, and attracting tens of trillions of won in investment corresponds to a quasi-receipt act," he explained. .
LKB is handling cases centered on lawyers from the Capital Market Law and Intellectual Property Team, and is looking for investors to participate in legal action.
According to LKB, inquiries from overseas investors such as the US and Italy are continuing.
This case is expected to be the first case since the Seoul Southern District Prosecutors' Office's Joint Financial and Securities Crime Investigation Team (Hapdan) was revived after the inauguration of Minister of Justice Han Dong-hoon.
LKB explained, "We have submitted a complaint and complaint to the Hap Sudan, which was called 'Yeoido Grim Reaper' in the past, with the earnest desire for the recovery of the damage to proceed quickly, fairly and justly."
"This case is complex, there are many legal issues, and the amount of damage is astronomical," he added.
The prices of Luna and UST have recently plummeted, with their totals evaporating about 45 billion dollars (57.78 trillion won) in one week, and it is estimated that only 200,000 domestic investors suffered a loss.
Some pointed out that the peculiar algorithm adopted by Terraform Labs is in fact a 'Ponzi scam' (multi-level financial fraud).
Terraform Labs adjusted the supply of Luna, the base currency of the Terra blockchain ecosystem, to match the value of one UST to $1.
However, when the cryptocurrency market froze, the algorithm became inoperative, causing the UST to fall below $1.