Terra Investigation Picks up Pace as South Korean Prosecutors Raid Top Exchanges

South Korean investigators from the Seoul Southern District Prosecutors Office raided top cryptocurrency exchanges, including Upbit, earlier today as part of an ongoing probe into the failed Terra blockchain, according to a report published by The Korea Herald.

The investigation into Terraform Labs, the company behind the beleaguered crypto project, was launched by South Korean police and prosecutors in early June due to embezzlement and tax evasion allegations.

The massive implosion of Terra also prompted South Korea to revive its special financial crimes unit.

Earlier this July, the Yonhap news agency reported that South Korean authorities reached an agreement with their U.S. counterparts to share investigation data about the troubled crypto project, whose sudden collapse resulted in roughly $40 billion worth of losses.

While Terra's Do Kwon attempted to revive by ditching the TerraUSD (UST) stablecoin and launching a brand-new token, Terra failed to get a successful fresh start. The token plunged by more than 80% shortly after its launch. The new Luna cryptocurrency is currently in 139th place by market cap, which is a huge loss for a project that once had two coins in the top ten.

Last month, Kwon, Terraform Labs and other parties involved in the disaster were hit with a lawsuit that accuses the defendants of misleading investors by promoting unregistered securities.

Prior to the project's downfall, Kwon had repeatedly mocked critics who were skeptical of the stablecoin's sustainability.

Stablecoins have also faced more regulatory scrutiny around the world in the aftermath of the Terra disaster.