SoKor Authorities Subpoena All Terra Employees As Probe Into Price Manipulation Continues

South Korean authorities are serious about getting to the bottom of the historic Terra collapse that wiped out billions of dollars in investment a few weeks ago. A new report claims that authorities in the country have already summoned all people working with and for terraform Labs.

As part of the full-scale investigation of the Terra native toke LUNA and algorithmic stablecoin UST, the Joint Securities and Financial Crimes Investigation Team of the Seoul Southern District Prosecutor’s Office has invited all Terraform Labs employees, including developers, in the hope that they could learn more about what happened to the company, local news agency JBTC reported.

The authorities are said to be looking into the case to see if indicators are pointing to price manipulation. The team also wants to investigate if the company's assets, which investors placed their money, have undergone proper listing procedures.

Additionally, investigators alleged that the company's mechanism was flawed and that UST was not pegged to a stable profit model or collateral, the report claimed. "If you pay interest of several tens of percent to investors without a stable collateral or profit model, people may flock to you at the beginning," authorities explained.

However, "at a certain point in time, it has no choice but to collapse because it cannot handle interest payments and fluctuations in value," authorities handling the investigation said. "Even at that time, there was an internal warning that it could collapse at any time, but CEO Kwon Do pushed to release the coin," a Terra employee reportedly told a local news agency.

Doubts on Terraform Labs CEO and Founder Do Kwon started when documents showed Kwon dissolved and liquidated the company days before the UST de-pegged and crashed LUNA and UST's value to virtually zero. Kwon has launched a new Terra blockchain and already introduced a new version of digital asset dubbed LUNA 2.0, promising old investors they will receive an airdrop of the new token and the team will burn the remaining UST.

LUNA Classic was trading down 5.53 percent at $0.0001213 with a 24-hour volume of $351,070,661, while the new LUNA token was trading up 4.70 percent at $8.59 with a 24-hour volume of $557,758,675 as of 2:52 a.m. ET on Tuesday, according to the data from CoinMarketCap.