• KBS believes that Terraform Labs tricked South Koreans into investing in stablecoin
• Prosecutors in South Korea open investigation into Terraform and its fraudulent scheme
Recently the press in South Korea accused TerraForm tricked South Koreans into investing in stablecoin. As indicated by the local media KBS, the crypto platform increased its services and operations in DeFi based on all the stolen information, and the prosecution opened an investigation.
Terraform Labs is a crypto company founded in 2018 in the capital city of Seoul and is responsible for managing the Anchor and Terra Blockchains. Likewise, the web platform is a powerful developer of Apps in Defi and PoS services.
South Korean press accuses Terraform of information theft
KBS, a famous public broadcasting company in South Korea, formally accuses Terraform of taking key information for its benefit. The local media indicates that the crypto platform and all its directors are the most exceptional clients in deposits, guaranteed services, and credits with TerraUSD using the Anchor network.
KBS shows how Terraform managed the Anchor account using a good flow of deposits through UST. In April alone, the Anchor network had around $12B in TerraUSD, making it the best DeFi server in South Korea.
But from what KBS indicates, the crypto company manipulated the numbers to attract more investors to buy USDT. With these accusations, an investigation would be opened from Seoul to determine if KBS is right.
The Anchor protocol server provided about 19 percent annual performance to all its customers interested in UST. Following the issue with TerraUSD, where the crypto lost its 1:1 peg to the US dollar for May, the stablecoin rebranded to USTC or TerraClassicUSD.
South Korea no longer trusts UST
While the UST problem did not escalate into losing funds among its investors, research suggests South Korea no longer trusts the stablecoin. National regulators are reported to have updated their ban policies focused on stablecoins. These regulations seek to improve investment security and avoid possible financial collapses among those affected.
Not only is South Korea investigating Terraform Labs for manipulating its investment numbers, but there is also a similar lawsuit in the US territory. On this occasion, the crypto platform CEO is accused of conveniently using the data, so TerraForm is seen as a viable option.
The parity loss in UST left many investors without their money. The loss figures exceed billions of dollars, according to various investigations. Even this failure was so great that the entire crypto community was affected, confidence in the technology of stablecoins was lost, and some tokens fell in their market capitalization.
Crypto trading is picking up as people forget what happened to UST and turn their sights to major stablecoins like USDT.