The issue between South Korea’s authorities and Terraform Lab is not over. The platform was recently called out for operating in the country without remitting taxes. The report last week revealed that Terraform owes nearly $80 million to the South Korean government for taxes. However, the founder of Terra, Do Kwon, has refuted the claim.
Terraform Facing Series Of Issues
Apart from the taxation issue, Terraform’s cryptocurrency project is currently in a mess, following the crash of the two native digital assets – TerraUSD and LUNA – in the past two weeks. South Korean authorities say one of the projects owes $78 million in taxes to the government. However, Kwon said Terraform had paid all its dues.
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TerraUSD and LUNA were launched as stablecoins. This means that their values are pegged to the dollar. But the complete crash of the tokens to nearly $0 sent shock waves across the global crypto community.
UST, the stablecoin issued by Terra, first lost its value against the dollar. This resulted in arbitrage trading against LUNA, which ultimately led to the crash of both assets. As of the time of writing, LUNA is trading at $0.00016.
Reports revealed that more than 200,000 South Koreans invested in stablecoins before the crash. In response to the market misfortune, the South Korean Parliament ordered Do Kwon to appear before a hearing session. The goal is to discuss the crash and find solutions to remedy the issue.
Do Kwon Faces A Myriad Of Issues
Do Kwon has attracted massive negative attention since he is the founder of the Terra ecosystem. He is currently facing a myriad of issues, including being at the edge of losing multi-million dollar bets, being harassed at home by affected investors, and being charged with tax evasion by the South Korean authorities.
“We have no outstanding tax liabilities in Korea,” Kwon stated while responding to the issues from the authorities. He reiterated that the local tax authorities had already carried out a tax audit on the company, but all taxes were cleared in full at the time.
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