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South Korea revives Grim Reapers to investigate Terraform Labs

19 May 2022 : 11:31
2 min read
  • The Grim Reapers is assigned to complete the investigation on Terraform Labs.
  • Terra case would be the first to be investigated by the reconstituted Securities Crimes Joint Investigation Team.
  • National Tax Service (NTS) of South Korea is levying $78 million for tax evasion.

South Korea is determined to investigate the Terraform Labs and its co-founder Do Kown’s failed Terra project.

South Korea brings its Grim Reapers

South Korea has assigned its special investigative and prosecutorial team also called The Grim Reapers, to complete the investigation on Terraform Labs. The team aims to prosecute securities fraud and unfair trading schemes. It has plans to specifically target Terraform Labs’ co-founders, Do Kwon and Shin Hyun-Seong, along with the core Terra team. 

As per a recent report by the local media outlet SBS News, the Terra case would be the first to be investigated by the reconstituted Securities Crimes Joint Investigation Team. According to the report, a representative from the team said that the severe price downfall of UST and LUNA has seriously affected the average citizens.

The team earned The Grim Reapers’ title for handling high-profile and complex cases, including the $1.2 billion Lime Asset Management embezzlement scandal. Before its disband, the unit made 346 arrests from 965 cases prosecuted between 2013 and 2020.

NTS levies $78M on Terraform Labs for tax evasion

In a separate report by the South Korean media outlet, Naver, it is reported that the National Tax Service (NTS) of South Korea is levying an additional $78 million (100 billion won) on Do Kwon and Terraform Labs on tax evasion charges. Do Kwon, who owns 92% of Terra Labs, has been dissatisfied with the taxation since December 2021.

Surprisingly, the report discloses that he attempted to liquidate a domestic firm and relocate his residence overseas soon before the Terra crash, prompting suspicions that he was attempting to avoid paying taxes. Terraform Labs’ domestic headquarters in Busan and Seoul were liquidated on May 4 and 6, respectively, before the Luna event.

Kwon is blamed by many in the community for the project’s failure. In South Korea, a group of Terra investors is planning to suit Kwon in both civil and criminal court for damages and fraud. They will also seek to have Kwon’s assets seized by the court.

Shortly after the so-called algorithmic stablecoin, UST’s collapse caused chaos in crypto markets, and the company’s in-house legal department reportedly resigned.


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Anisha Pandey

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