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Terra Luna: Founder Do Kwon sued for $78 million

 


The news surrounding the "fall" of Terra Luna doesn't let up. Terraform Labs, the company behind the Terra blockchain, and Do Kwon are now facing a slew of lawsuits from tax authorities, users, and investors alike.


According to local reports , the South Korean tax authority first launched an investigation into Terraform Labs (the company behind Terra) and its subsidiaries in June last 2021. The reason was the suspicion of tax evasion.


At that time, the investigation showed that the company's subsidiaries were registered abroad. However, the place of actual administration was in South Korea. Therefore, under South Korean law, these companies are considered taxable to the government. 


As a result, the tax authorities already fined Terra 's subsidiaries 44.7 billion won (US$34.7 million) in corporate income tax and 4.66 billion won (US$3.6 million) in income tax last October .


According to the report, in December last year, Do Kwon planned to liquidate the company's headquarters and settle overseas. However, this was unsuccessful due to the fall of Luna.


Lawsuits against Terra Luna are piling up

During the TerraUSD drama, Terraform Labs sent $LUNA to the Foundation Guard (LFG) to reimburse losses suffered by Anchor. The tax authorities saw this as suspicious and suspected tax evasion.


Now Terraform Labs, as well as Do Kwon and other co-founders, have been fined 100 billion won by the South Korean tax authorities. That's the equivalent of around 78 million US dollars. The reason for the lawsuit is tax evasion. 


All of this is happening amid the planned rebuilding of the Terra ecosystem. While some users are showing hope and optimism, others are taking the authorities route. 


Another Korean group calling itself "Victims of Luna" is also planning to file a class action lawsuit against Terraform Labs and co-founder Do Kwon. The reason for this is fraud and illegal crowdfunding. Expect more such lawsuits to be filed in the near future.


The $78 million tax fine came less than 24 hours after reports emerged that Korean investors were filing criminal and civil lawsuits against Do Kwon.


It was recently revealed that Do Kwon already launched a failed stablecoin in the past . This stablecoin was called Basis Cash and now trades for under a cent. One can only hope that Terra Luna and TerraUSD do not have to share the same fate.


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