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A group of investors who lost funds along with the collapse of Terra filed a lawsuit against the founders of Terraform Labs.
One of the founders of the collapsed Terraform Labs network, Do Kwon, may be charged with criminal charges for participating in a financial pyramid scheme. South Korean prosecutors are actively investigating the case to see if they can bring additional charges about creating a Ponzi scheme.
On Thursday, a group of South Korean investors filed a lawsuit against Kwon and his co-founder Daniel Shin, accusing the company’s founders of fraud and other financial irregularities related to the collapse of Terra. The Seoul Southern District Prosecutor’s Office, which began a pre-investigation investigation, instructed its financial crimes team to find out whether Kwon intended to develop a pyramid scheme, promoting unstable UST profitability under the Anchor protocol.
According to a spokesperson for a South Korean law firm representing the interests of investors who have applied to the court, the Anchor protocol can be considered a Ponzi scheme because of its instability, as it constantly requires an influx of new investors to allow the old to enrich themselves.
Also, on May 24, a special meeting will be held jointly on the LUNA incident in the National Assembly of South Korea. Parliamentarians and officials will have to discuss additional measures to protect investors when exchanging virtual assets and make, if necessary, amendments to the law on digital assets.
Earlier, the technical director of Tether Paolo Ardoino (Paolo Ardoino) said that he does not see fraud in the collapse of the Terra ecosystem and the UST stablecoin. The expert believes that the matter is in the poor architecture of the project.
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