Last week, Terra (LUNA) suffered a complete and utter implosion; however, investors continue to trade the token despite its enormous fall, which saw the price of LUNA lose its value by 99%, plummeting from $62 on May 9 to less than a cent by May 14.
Fast forward to May 20, and LUNA remains the most trending out of all the cryptocurrencies that people are searching for on CoinMarketCap.
As things stand, the DeFi asset is trading at $0.00014 up 8.45% in the last 24 hours and a further 281.60% in the last week, with a market cap of $915 million.
Authorities investigate Do Kwon
What’s even more remarkable is not only is the token trending after the recent collapse but also as South Korean officials have established an emergency financial crimes section in order to examine the collapse of the stablecoin protocol Terra. Additionally, the authorities have penalized the protocol’s inventor, Do Kwon, for $78 million for tax fraud.
The government authorities are interested in figuring out why Terra’s dollar-pegged stablecoin, UST, lost its peg on May 9. Within four days of the crisis, the market for stablecoins lost $18 billion, Terra’s TVL lost $26 billion, and as mentioned the value of Terra’s network token, LUNA, dropped from $65 to a fraction of a penny.
The Financial Services Commission and the Financial Supervisory Service of South Korea have both requested data from local cryptocurrency exchanges.
The requested information includes trade volumes for LUNA and UST as well as the number of investors who have suffered losses as a result of the market decline. According to the statements of one local exchange operator to Yonhap, “I think they did it to draw up measures to minimize the damage to investors in the future.”
Terra found guilty of avoiding taxes
Tax authorities in Korea have found Terra’s parent firms guilty of avoiding corporate and income taxes. To avoid paying taxes, the Korean National Tax Service said that Kwon had moved LUNA from its software firm, Terraform Labs, to Singapore’s Luna Foundation Guard (LFG), a non-profit organization created to help Terra.
For the $3 billion in Bitcoin LFG acquired and sold in a last-ditch bid to salvage UST, Do Kwon was penalized $78 million by the tax department and may be fined more.
While Do Kwon and Daniel Shin were requested to pay $100 million in taxes by the NTS in December, they declined since Terraform Labs is domiciled in Singapore. However, according to the NTS, all of their operations are controlled from South Korea.
Whatsmore, it was only a few days before the collapse of Terra that Do Kwon attempted to dissolve Terra’s Korean entities. There is speculation among onlookers as to how long before the chain crumbled Do Kwon had been prepared for Terra’s downfall
Meanwhile, Kwon is being sued by some of the 200,000 people in Korea who invested in either LUNA or UST over the failed protocol.
The local legal company LKB & Partners, as well as the staff of the law firm, are included as plaintiffs in a lawsuit that was reportedly filed on behalf of investors who suffered financial losses.