South Korean police demand to freeze LFG assets

South Korean police authorities are taking measures to freeze assets associated with the non-profit group Luna Foundation Guard, according to KBS, the country’s national broadcaster.

According to the publication, the Seoul Metropolitan Police Administration has asked several exchanges to block Luna Foundation Guard (LFG) from withdrawing any corporate funds.

However, exchanges are not required to do so by law, meaning it’s unclear whether these actions will be carried out, according to KBS.

Police said they intervened after finding evidence indicating funds had been embezzled at LFG, according to the report.

Following the recent collapse of Terra, which caused the value of a TerraUSD (UST) stable coin to fall below $0.10, some investors have already sued Terraform Labs founder, Do Kwon.

Also in the wake of the recent collapse of the Terra ecosystem, Korean lawmakers are meeting with representatives of South Korea’s five largest exchanges on Monday and Tuesday, Chosun Daily reported.

According to Newspim, these are companies Upbit, Bithumb, Coinone, Korbit and Gopax. They will probably have to answer the question of whether they should also be held responsible for the loss of funds by token holders.

“We will demand that exchanges implement a quality investor protection policy,” said Yoon Chang Hyun, chairman of the People’s Power Party’s Special Committee on Virtual Assets.

Coinone suspended trading in Luna, which is part of the Terra ecosystem and was supposed to help UST maintain its peg to the dollar, after its value plummeted. At the same time, Korbit and Bithumb issued “investment warnings.”