The CEO of Terraform Labs could face criminal charges in connection with the collapse of two cryptocurrencies associated with the project earlier this month.
South Korean prosecutors are now considering whether to charge CEO Do Kwon of Terraform Labs with pyramid scheme fraud. Investors have sued him over the collapse of two cryptocurrencies of the company.
The collapse caused Terraform’s two main tokens TerraUSD and Luna coin to fall more than 99.99% from their ATH, causing investors to lose billion of dollars in a week.
The authorities have said about 280,000 investors are holding about 70 billion Luna coins, while the exact amount of the damage remains unknown.
Five South Korean investors filed last Thursday criminal lawsuits against Kwon and co-founder Daniel Shin for fraud and other financial irregularities, arguing their combined losses totaled 1.4 billion won ($1.1 million).