South Korea bans current and former Terraform Labs employees from leaving the country
Earlier this year, Terra was listed as one of the top ten fastest-growing crypto ecosystems boasting an impressive 305 per cent growth in developers over a twelve-month period. Now, Terraform Labs employees are starting to feel the hot water that the collapse of the coin has dropped them in.
Related reading: Read more about the Terra USD collapse here
South Korean prosecutors are now banning Terraform Labs employees from leaving the country whilst the investigation into both Terra and its co-founders continues. This ban was put in place so employees couldn’t flee the country to avoid questioning.
Terra employees turned to social media to express their frustration with the travel ban placed upon them. Daniel Hong, who is a former employee of Terraforms Labs, was vocally angry on Twitter that the travel ban prevented him from travelling to New York.
“None of us were notified of this at all; when I found out about this, the South Korean prosecution told me they usually don’t notify people of this because they might destroy evidence and/or leave the country beforehand” Hong tweeted.
Hong said placing the travel ban on employees makes them feel like “potential criminals” and is “absolutely outrageous and unacceptable” in a separate tweet.
Meanwhile, Do Kwon, founder of Terraform Labs, is not only under investigation in South Korea, but also with the Securities and Exchange Commission (SEC) in the USA. The Securites and Exchange Commission will investigate whether Kwon and Terraform violated federal security laws, the US Court of Appeals has ordered. Kwon currently resides in Singapore, and there is speculation as to whether the prosecution team will invalidate his passport before launching a more comprehensive investigation into him.
According to CoinGeek, this investigation by the SEC was initiated late last year over digital assets issued by Terraform which are based on their platform Mirror Protocol. The protocol is designed to ‘mirror’ the price of U.S Securities and was the basis for the TerraUSD Stablecoin.
In Northern California, a class-action lawsuit was filed this month by investors of TerraUSD who accused Kwon and his company of selling unregistered securities and misleading investors by “repeatedly touting the stability of USDT”.