South Korean Law Firm Sues Terraform Labs Co-Founder Do Kwon on Behalf of Investors
- Major South Korean law firm LKB & Partners has filed a lawsuit on behalf of ordinary investors.
- The lawsuit alleges fraud by Kwon and demands the provisional seizure of property.
- The media outlets report that lawsuits from other groups of investors may also be in store.
Terraform Labs co-founder Do Kwon is facing more trouble, as local media outlets in South Korea report that a major law firm is suing him over the collapse of LUNA and UST. Media outlets reported that LKB & Partners had filed a lawsuit on behalf of ordinary investors. It is believed that the employees of the law firm are among those who had invested in the Terra ecosystem.
According to the report, investors have also filed a complaint with the Seoul Metropolitan Police Agency, claiming fraud on the part of Do Kwon. The lawsuit also claims fraud and demands the seizure of property against the CEO. Kim Hyeon-kwon, a partner at LKB & Partners, said,
“There are related investors inside the law firm, and we plan to file a complaint against CEO Kwon at the Financial Investigation Unit of the Seoul Metropolitan Police Agency.”
And that’s not the only case that might take place, as the report notes that multiple groups of investors might be filing cases. The operator of the Naver Cafe “Terra/Luna Coin Victims Association” said they would file a case against Kwon and the other Terraform Labs co-founder Shin Hyun-sung. The charges here will also be fraud.
The troubles keep piling up on the Terra network and its executives, and this may be the first of a string of serious follow-ups on the crash. So far, the team has avoided any major legal action and focused on reparations, but it may not be enough to keep angry investors away.
Terra Community Not Pleased as Rescue Plans Have Little Effect
The Terra community has grown increasingly upset over the crash of the LUNA and UST tokens. At first, there was some support in the community, many of whom were expecting a bounceback in due time. But that support has declined slowly, culminating in 90% of the Terra community voting against Kwon’s fork proposal.
Meanwhile, the Luna Foundation Guard has taken a number of steps to try to stem the bleeding of the assets. Just two days ago, it suggested a compensation plan for UST holders and declared its remaining reserves. An advisor to the Luna Foundation Guard also said that more information on the balance reserves would be offered soon.
The following months will be critical for Kwon and others, as the regulatory and legal pressure will invariably heat up. South Korean legislators have invited Kwon and local exchanges to congress to discuss the LUNA crash. Kwon has also been subpoenaed by the U.S. Securities and Exchange Commission.
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