KEY POINTS

  • Terraform Labs is currently being investigated by various authorities
  • The USSEC is also looking into the design structure of Terra
  • LUNA 2.0, the native token of the new Terra blockchain was trading down 0.51 percent at $3.10

The US Securities and Exchange Commission (USSEC) reportedly has proof that Terraform Labs funneled around $80 million in funds to multiple cryptocurrency wallets in the months leading to the collapse of Terra's algorithmic stablecoin UST and its native token LUNA.

Terraform Labs may have moved on from LUNA and UST, but authorities are hell-bent on trying to get to the bottom of the collapse that dragged the entire cryptocurrency down for weeks, letting them trade in a bearish market.

While authorities in South Korea, where two TFL offices were previously situated, are currently investigating the collapse, the USSEC is conducting its own investigation on CEO and founder Do Kwon and several Terra employees for potential irregularities leading to the downfall of the once-glorious cryptocurrency.

Apparently, the USSEC conducted a video survey with some of the key designers of TFL to look into the design structure of Terra, a local news agency reported. During the investigation, the team stumbled upon a situation where 100 billion won or around $80 million of the company's funds were being funneled monthly to different crypto wallets for "operating expense."

Bringing Crypto Mainstream DeFi and Beyond 4-36 screenshot
As a part of SKALE network's mainnet launch series, our CEO, Do Kwon joined Jack O'Holleran CEO of SKALE Labs and Simon Seojoon Kim CEO and managing partner from Hashed talked about bringing crypto mainstream in this panel talk. YouTube Screenshot/Terra Offiicial YouTube Channel

These transactions happened in the months leading to the collapse of Terra. Reports claimed that the USSEC saw it as a red flag that screamed potential money laundering activity -- something several insiders previously claimed Do Kwon maneuvered.

The USSEC secured statements from TFL employees stating that "the funds flowed into dozens of cryptocurrency wallets." One of the key informants claimed Kwon had not received any official payment from the company, triggering more suspicions.

"This corroborates the information provided by my sources (that indicated Do Kwon had silently been cashing out hundreds of millions into foreign bank accounts & bitcoin wallets)," FatManTerra, the mouthpiece of some of the TFL whistleblowers, tweeted. The Twitter user has accused Kwon of lots of allegations but has yet to provide any piece of evidence implicating the Terraform Labs founder.

LUNA 2.0, the native token of the new Terra blockchain was trading down 0.51 percent at $3.10 with a 24-hour volume of $624,790,408 as of 4:22 a.m. ET on Friday based on the latest data from CoinMarketCap.

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