South Korea Puts Pressure On Terra's Do Kwon And Shin; TFL Faces Another Class-Action Lawsuit

KEY POINTS

The South Korean government continues to investigate Terraform Labs
The investigating team received approval on its request to issue a "notice of arrival" for Do Kwon
Do Kwon is believed to be currently staying in Singapore

South Korean prosecutors investigating the allegation of fraud against Terraform Labs on the days leading to its collapse have issued a "notice upon arrival" and departure ban on the company's previous and current company employees, local media reported.

The request was reportedly made by the Seoul Southern District Prosecutor's Joint Financial and Securities Crime Investigation and was approved by the South Korea Ministry of Justice on Tuesday.

Terraform Labs co-founder Do Kwon is believed to be currently staying in Singapore and the latest "notice upon arrival" will alert the authorities when the executive arrives in the country. Kwon is being investigated for fraud and money laundering allegations.

What Are Terra Stablecoins — Terra released a set of explainer videos in September 2020 in partnership with CoinMarketCap Terra Official YouTube Account

A departure ban on TFL employees is also in effect, which includes TFL co-founder Daniel Shin, former Vice President Kim Mo and other officials from leaving the country. That's not all.

According to Korean media donga, South Korea's Ministry of Justice approved a ban on multiple Terra managers from leaving the country and required notification of entry to Do Kwon, who now lives in Singapore. https://t.co/AIvX3rBjq0
— Wu Blockchain (@WuBlockchain) July 27, 2022

A class action lawsuit was filed by the U.S. law firm Bragar Eagel & Squire, P.C. against Terraform Labs, Do Kwon and several crypto entities, including Three Arrows Capital, Jump Crypto and Jump Trading, in California on Sunday. The complaint represents consumers who have invested in Terra between May 2021 and May 2022.

The class-action lawsuit accuses the defendants of multiple charges, including racketeering and violating provisions of the Securities Act.

"The complaint alleges that defendants violated the provision of the Exchange Act by carrying out a plan, scheme, and course of conduct that TFL intended to and did deceive retail investors and thereby caused them to purchase Terra Tokens at artificially inflated prices; endorsed false statements they knew or recklessly should have known were materially misleading; and made untrue statements of material fact and omitted to state material facts necessary to make the statements not misleading. The complaint alleges that TFL and the individual Defendants also violated provisions of the Securities Act by participating in TFL’s failure to register the Terra Tokens," the press release read.