South Korean Media Accuses Terra Of Insider Trading

Terraform Labs and affiliates allegedly increased the revenue of its decentralized finance (DeFi) service ‘Anchor Protocol’ through insider trading.

South Korean Media Accuses Terra Of Insider Trading

As reported by the South Korean broadcaster KBS, Terraform Labs and its affiliates allegedly increased the revenue of its decentralized finance (DeFi) service the ‘Anchor Protocol’ through insider trading. As reported by KBS, South Korean prosecutors are currently looking into the claim

Insider Trading on the Anchor Protocolย 

In the report, KBS claims that Terraform Labs and its investors were the largest customers of TerraUSD deposits, loans, and collateral services on the Anchor Protocol.

Sponsored

KBS specifies that Terraform Labs and its foreign investors were in charge of the Anchor Protocol account, with the most eminent number of deposits being made in TerraUSD (UST). In April, the Anchor Protocol held 12 billion UST stablecoins, making it one of the largest DeFi providers at the time.

According to KBS, the business reportedly inflated its numbers in order to attract and win over investors for Terra’s stablecoin and sibling cryptocurrency. The Seoul Southern District Prosecutor’s Office in charge of the investigation did not dispute the KBS report when asked for comment.

The Anchor Protocol DeFi service offered up to 19.5% annual percentage yield to users who deposited TerraUSD (UST) stablecoins. After the Terra crash in May, the stablecoin was re-named TerraClassicUSD (USTC).

TerraClassicUSD (USTC) had a short-term come back at the end of June, when it surged 400%, TerraClassic (LUNC) was also up by 182% in the same period, only to crash again in July. More than 48 projects based on the Terra blockchain started migrating to the Polygon ecosystem due to the crash.

On the Flipside

  • Following Terra’s crash, governments have started strengthening their regulatory frameworks, especially those regarding stablecoins. Such regulations are intended to bring more safety to investors.
  • Recently, another class action lawsuit was filed in the U.S. against Terraform Labs and its CEO, Do Kwon, who has been accused of misleading investors. An alleged Terra insider, known as ‘Fat Man’ also joined the lawsuit.

Why You Should Care

Aside from wiping out billions worth of investor money, the Terra crash had a huge impact on the crypto market. The failure of TerraLabs was so immense that it shook the entire crypto asset class, single-handedly erasing half a trillion dollars from the sector’s market cap, and leading to a breakdown of trust throughout the space.

Check out our opinion piece on holding Terraโ€™s CEO accountable for the crash:
https://dailycoin.com/why-is-lunas-do-kwon-not-in-prison-yet/

To find out more about Terraโ€™s crash and it’s impact on crypto adoption, read:
https://dailycoin.com/down-to-zero-terra-luna-crash-and-its-impact-on-crypto-adoption/

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Paulina Okunyte

Paulina is a writer, reporter, and digital craftswoman. Her educational background extends from anthropology to IT & multimedia. She has experience working with tech startups, as well as mastering the craft of journalism. At DailyCoin, Paulina focuses on the world of metaverses, NFT marketplaces, NFT art, and blockchains backing NFT technology.

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