South Korean prosecutors have reportedly confiscated around $160 million worth of assets from eight individuals linked to the downfall of Terraform Labs, including co-founder Daniel Shin. The Seoul Southern District Prosecutor’s Office reportedly seized approximately 210 billion won worth of property, mainly real estate, owned by former Terra employees. The assets were taken in a bid to prevent the accused from disposing of them and ensure they were part of potential criminal proceedings.
“We are still investigating the property ownership status of the suspects, and we plan to carry out collection preservation for the confirmed property in the future in order to recover the proceeds of crime and recover damages,” said a spokesperson for the prosecution team.
The actions were taken to prevent the accused from disposing of assets in an attempt to ensure they were part of potential criminal proceedings. The prosecutors also seized Shin’s home in Seoul last November, but are reportedly still investigating other assets allegedly connected to the Terra co-founder. At the time of publication, no South Korean court had authorized an arrest warrant for Shin.
It is worth noting that the report did not mention any cryptocurrency assets seized as part of the investigation. Terraform Labs is a South Korean blockchain start-up that launched the Terra stablecoin, and the company’s downfall caused a stir in the crypto community. Co-founder Do Kwon, who had been missing for months, was arrested in Montenegro in March. The local government received requests from both the United States and South Korea to take Kwon into custody.
In response to the Terraform Labs/LUNA event, South Korean authorities have also announced their intention to control stablecoins. The Financial Services Commission (FSC), the primary financial regulator, has established a new crypto task force with the aim of formulating policy recommendations before the new act is created.
Despite concerns over stablecoins, South Korean authorities want to follow the lead of their international peers, particularly in terms of stablecoin legislation. The FSC and other authorities have emphasized that any policy must be developed “in a manner that is consistent with overseas regulations.”
The Terraform collapse has had wide-ranging consequences, with investors and former employees left in the lurch. Terra’s collapse in May 2022 was attributed to “serious” accounting issues, which resulted the price of the then-$18-billion algorithmic stablecoin to wobble and drop to just 35 cents USD (the coin was supposed to maintain a $1 peg) in just two days. The subsequent investigation has led to several high-profile arrests, and the prosecutors’ latest actions show that they are determined to bring those responsible to justice.
