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South Korea’s tax authorities have set their sights on the sinking Terraform Labs and its co-founder Do Kwon.
According to a report published by local newspaper Naver, South Korea’s National Tax Agency imposed a fine of 100 billion won ($78 million) on Terraform Labs and its co-founder Do Kwon, accusing her of tax evasion. Earlier it was reported that the company attracted the attention of the supervisory authorities of South Korea against the background of the collapse of LUNA and UST.
The publication notes that Kwon was unhappy with the taxation of digital currencies in the country and tried to liquidate Terra’s internal operations shortly before the collapse of LUNA.
For the first time, Terraform Labs came to the attention of the tax authorities in June last year – the company was suspected of evading corporate and income taxes. The tax authority examined the documents of the company and its subsidiaries, and found out that Terraform was registered not only in Singapore, but also in the Virgin Islands.
According to the legislation of South Korea, companies are taxed at the place of actual management. Despite the fact that Terraform’s subsidiaries were registered abroad, they were managed from South Korea. At the same time, Terraform has repeatedly transferred LUNA from Terra Singapore to Luna Foundation Guard to avoid taxation and compensate for the loss of the Anchor protocol.
Recall that earlier, against the background of the collapse of UST, Terraform Labs left most of the legal team, leaving all the company’s legal affairs to a third-party firm.
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