South Korean Authorities Ask Exchanges to Block LFG From Withdrawing Funds: Report

South Korean police are reportedly looking to freeze assets associated with the non-profit organization Luna Foundation Guard (LFG) following the eventful collapse of Terra (LUNA).

• According to South Korea’s national broadcaster Korean Broadcasting System (KBS), on Monday (May 23, 2022), the Seoul Metropolitan Police Agency asked several exchanges in the country to prevent LFG from withdrawing funds.
• Although such platforms are not mandated by law to carry out the police request, it remains unclear if they would actually take any action.
• The latest development follows the collapse of Terra’s native coin LUNA and the de-pegging of its algorithmic stablecoin UST earlier in May. The crash led to massive losses for investors, who later slammed Terra co-founder Do Kwon with a lawsuit, accusing him of fraud.
• There were earlier reports stating that Do Kwon could appear before South Korean authorities concerning UST’s price plunge. The country’s national tax service also hit the Terra co-founder with a $78 million fine for tax evasion. Nevertheless, Kwon claimed that his company had resolved all of its taxation issues in Korea.
• Regarding the request to freeze LFG’s assets, the Seoul Metropolitan Police Agency claimed that there were clues that point to the group’s funds being linked to embezzlement.