South Korean police order exchanges to freeze funds related to LFG

South Korean Police have filed notifications to cryptocurrency exchanges in the country, asking for the freezing of funds associated with the Luna Foundation Guard (LFG).
South Korean police order exchanges to freeze funds related to LFG
South Korean police order exchanges to freeze funds related to LFG

Korean officials issued a request to the country’s leading crypto exchanges on May 23rd, 2022, to prohibit monies from being withdrawn.

The Seoul Metropolitan Police Agency specifically requested that the Luna Foundation Guard refrain from taking any action. According to the authorities, clues have been discovered that may link the organization to embezzlement.

Investor portfolios were smashed overnight earlier this month by the Luna/Terra algorithmic stablecoin disaster, which saw the coin’s value plummet by almost 99 percent.

This request, however, is not in demand and is not legally enforceable. Each exchange can pick how they want to respond, but how they will react is unknown.

Do Kwon, CEO of Terraform Labs, has been probed and sued by several major Korean investors over the collapse of the UST stablecoin. The “Grim Reaper,” a Korean Financial and Securities Crime Joint Investigation Team, was reactivated as a result of this.

Korean lawmakers have met with executives from each of these platforms, including Upbit, Bithumb, Coinone, Korbit, and Gopax. This meeting is presumably a tactic to exert pressure on the heads of these exchanges because they are not compelled to comply.

“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 outlet, it is reasonable to believe that exchange representatives will be held liable in some way for the losses suffered by investors as a result of the LUNA disaster. According to Newspim, the Korean National Assembly is taking steps to control punishment in this area.

Two of the exchanges had already published warnings on their websites, with Coinone suspending LUNA trading as of May 11th and Binance suspending limited spot trading.

Despite the fact that this official report is part of a larger tale, the request to crypto exchanges and the Do Kwon probe are unrelated. The National Assembly’s and Korean government’s initiatives demonstrate that Korea is willing to take the required steps to resolve the Terra ecological collapse crisis.