Terraform Labs has been fighting for survival as one after the other; the problems seem to pile up. According to reports, Terraform Labs faces a tax evasion fine of 100 billion won ($78.5 million) from the South Korean authorities.
Do Kwon will face charges for reported tax evasion and will have to pay a penalty of 100 billion won ($78.5 million) for failing to pay corporate tax, according to South Korean news agency Naver. Kwon was rumored to be considering liquidating the company and relocating to Singapore due to his dissatisfaction with the country’s tax policies.
Terraform Labs were reportedly trying to evade tax payments
According to the news agency, Terraform Labs was attempting to liquidate the company and relocate its headquarters to another country. Many people were suspicious of the decision, believing it was a ruse to avoid paying taxes. According to the news agency’s sources, Do Kwon was notified by the National Tax Service that he owed 100 billion won ($78.5 million) in taxes.
Ancore and Terraform Labs had been probed by the National Tax Service. Corporate and income tax evasion lawsuits were filed against the corporations.
Do Kwon also owned a 92 percent share in Terra Singapore, according to a separate inquiry. However, the company’s chairman, Shin, ignored any ties to Terraform Labs. Later, it was discovered that he possessed an 8% investment in Terraform Labs.
Last October, the National Tax Service announced an investigation into Terra Virgin, which resulted in a 4.66 billion won income tax penalty. Terra Virgin is a wholly-owned subsidiary of Terra Singapore.
The tax service also discovered that Terra Virgin and Do Kwon sent free LUNA to LFG, a Singapore-based company. Terraform Labs was nabbed in the midst of transferring LUNA to avoid paying taxes, according to the news source.
Because the corporations were regarded as domestic firms, the entire decision to levy the tax was made. Despite the fact that the companies were founded and run in Singapore, the actual administration of the companies is based in Korea.