Police in South Korea has sent warnings to cryptocurrency exchanges, requesting the freezing of funds linked to the Luna Foundation Guard.
On Monday, Korean authorities sent a request to the country’s largest cryptocurrency exchanges, urging that funds not be transferred. The Luna Foundation Guard was specifically asked by the Seoul Metropolitan Police Agency not to take any action. Authorities claim they have acquired evidence linking the group to embezzlement.
The Luna/Terra algorithmic stablecoin debacle earlier this month devastated investor portfolios overnight, with the coin’s value plummeting by nearly 99 percent. This request, on the other hand, is neither a demand nor legally enforceable. Each individual can choose how they wish to answer, but no one knows how they will react.
Luna Foundation Guard might be in trouble
Several large Korean investors have investigated and sued Do Kwon, the CEO of Terraform Labs, following the collapse of the TerraUSD (UST) stablecoin. As a result of this, the “Grim Reaper,” a Korean Financial and Securities Crime Joint Investigation Team, was revived.
Korean lawmakers have met with executives from Upbit, Bithumb, Coinone, Korbit, and Gopax, among other sites. Because the leaders of these exchanges are not obligated to comply, this meeting is most likely a ploy to put pressure on them.
“We will review the exchange’s investor safety procedures,” Yoon Chang-Hyeon, chairman of the People’s Strength Virtual Assets Special Committee, wrote on Facebook, according to Newspim.
According to the publication, it is reasonable to assume that exchange representatives will be held accountable in some way for the losses suffered by investors as a result of the Terra (LUNA) price drop. The Korean National Assembly, according to Newspim, is making moves to limit punishment in this sector.
Coinone has suspended LUNA trading as of May 11th, and Binance has also suspended certain spot trading.
The request to crypto exchanges and the Do Kwon probe are unrelated, despite the fact that this official report is part of a broader story.