The fallout from the precipitous drop in the prices of the terra cryptocurrencies (LUNA) and the stablecoin terra USD (UST), continues to cause problems for the founder and creator of the digital assets, Do Kwon.
Now, Kwon could face legal problems in South Korea, his country of origin. A renowned law firm, prepares a lawsuit before the justice of that Asian nation.
The lawyers will act on behalf of various affected people, including some members of the law firm are part of the complainantssince they had invested in Terra UST.
In addition to the complaint, the lawyers also plan to request a provisional seizure order for Kwon’s properties, so that they can be seized by the South Korean prosecutor’s office, according to reported Munhwa daily.
Additionally, they filed a complaint against Kwon with the Financial Investigation Unit of the Seoul Metropolitan Police Agency.
This could be the first of many complaints against the founder of Terra, according to the local media, there are several groups of investors who are planning a class action lawsuit.
Terra without a legal team for his defense
The complaints that are now beginning to emerge against Terra, apparently have no one to attend to them within the company.
The company’s in-house legal team, led by Marc Goldich, Chief Corporate Counsel Lawrence Florio, and lead litigation and regulatory attorney Noah Axler resigned in the face of the debacle of the cryptocurrency.
This was confirmed by a source inside The Block. “The last week has been a challenging one for Terraform Labs, with a small number of team members resigning in recent days.”
South Korean authorities want to investigate Terra
But the problems for Terra founder Do Kwon don’t end there. As if that were not enough, a request was made to the South Korean National Assembly to open an investigation against the CEO of Terraform Labs.
Deputy Yoon Chang-hyeon, a member of the Political Affairs Committee of the National Assembly, who requested the inquiry, proposed summon before parliament the creators of the cryptocurrency, to render accounts and explain “the cause of the situation and the measures to protect investors.”
Chang-hyeon also warned that while they wait for a law to regulate cryptocurrencies, investors’ losses continue to mount. “Authorities continue to view the huge loss of digital assets as pointless,” she added.
These are the consequences of the fall in the price of UST and LUNA that occurred last week, affecting the rest of the market.
As CriptoNoticias reported, the stablecoins UST lost its peg to the US dollar and, as a consequence, the LUNA cryptocurrency lost 99.9% of its price.
The LUNA token, Terra’s governance currency, went from having a price of USD 85, on May 11, dropping to USD 15 and two days later it was trading at USD 0.00003465. Such was the severity that the total market capitalization of the cryptocurrency ecosystem fell to USD 1.2 trillion for the first time since July 2021.