TerraUSD Stablecoin Creators Banned From Leaving Korea

Prosecutors in South Korea have imposed a travel embargo on developers of the TerraUSD stablecoin – which collapsed last month and rocked the crypto sector – to stop them leaving the country while inquiries are conducted into the drama.

An official at South Korea’s Supreme Prosecutors’ Office, who declined to be named, said multiple employees from the Terraform Labs company had been put on a no-fly list.

He said he could not give further details until after investigations had wrapped up.

A report by The Block, which cited JTBC News, a local news website, suggested the move was undertaken by Korea’s Financial and Securities Crime Joint Investigation Team and could be “preparation for additional investigative actions such as search and seizures, as well as subpoenas for other persons of interest” involved in the multi-billion-dollar collapse.

Terra founder Do Kwon and Terraform Labs are already the subject of several probes at home and abroad over the collapse of luna and the TerraUSD (UST) stablecoin, The Block said.

Losses associated with the stablecoin also contributed to difficulties at Celsius, a US-based crypto lender which suspended withdrawals this month, and Singapore-based crypto hedge fund Three Arrows Capital, which is considering options including the sale of assets and a bailout by another firm.

Bitcoin, the world’s largest cryptocurrency, is trading at about $20,000, having lost about half of its value since early May, when the problems with TerraUSD became apparent.

Terraform Labs did not immediately respond to an emailed request for comment.

• Jim Pollard with Reuters

Note: Additional information was added to this report and the headline amended on June 21, 2022.