According to a local news report, prosecutors on Wednesday searched the Seoul house of Daniel Shin, the co-founder of Terraform Lab. As per the article, the operation was carried out as part of a larger inquiry into claims that fraud led to the collapse of the TerraUSD (UST) stablecoin.
A number of hedge funds and exchanges experienced overexposure as a result of TerraUSD’s sudden dissociation from its U.S. dollar peg in May, which had a ripple effect over the whole industry. The same month, some Luna (LUNA) investors from South Korea filed a complaint against Terraform Labs and co-founder Do Kwon, accusing them of fraud and breaking regional securities regulations.
The most recent target of a Korean government raid is Shin. Bithumb and Upbit were among the significant South Korean cryptocurrency exchanges investigated by authorities earlier this week. Numerous Terraform Labs associates, including former employees, were subject to a travel ban that was put in place by prosecutors in June.
The creator of Terraform Labs, Do Kwon, is accused of tax evasion, and this is being looked into concurrently by the authorities. Despite not being certain of their full-time residences, Shin and Kwon both have addresses in Singapore.