James Atkins
Editor
Editor
The South Korean police ask crypto exchanges to stop dead the assets of the Luna Foundation Guard (LFG). A non-profit organization formed, to assist with the Terra (LUNA) cryptocurrency, according to news reports.
Citing an industry source, local news outlet JoongAng Ilbo reports on May 16 that the cybercrime unit of the Seoul Metropolitan Police Agency. Had asked South Korean exchanges to prevent LFG from withdrawing or transferring its digital assets.
According to a KBS broadcast on Monday, the Seoul Metropolitan Police Agency’s cybercrime division sent letters to several exchanges. Urging them to prevent company funds withdrawals initiated by the LFG.
The South Korean National Police Agency’s cybercrime division has reportedly asked local cryptocurrency exchanges to freeze the assets of LFG, a South Korean crypto organization.
The South Korean police reportedly launched an investigation into the LFG. After it was accused of embezzling investor funds and not paying out promised returns.
LFG is accused of running a Ponzi scheme that collected 300 billion won (about $270 million) from over 8,000 investors. The organization allegedly promised annual returns.
The cybercrime division has asked exchanges to prevent company funds from being withdrawn by LFG. South Korean police have reportedly asked cryptocurrency exchanges to freeze the assets of a local crypto organization accused of running a Ponzi scheme.
According to the report, members of the 1st Cybercrime Investigation Unit’s investigation team. Are convinced stolen funds from the LUNA collapse are being kept in LFG accounts, therefore a freeze is warranted.
Despite the Police’s request, KBS claims that exchanges are currently not required to do so. Exchanges are free to act as they see fit because there is no legal obligation binding them, according to KBS.
What’s more, South Korean exchanges may not be able to comply with the request; if the LFG doesn’t have accounts on those platforms.
The news arrives amid a major clampdown on cryptocurrency-related crime in South Korea. Just yesterday, another report claims that the country’s tax agency is set to investigate nearly 60 major cryptocurrency exchanges.
The value of the stablecoin LUNA and TerraUSD (UST) plummeted significantly in July. With the de-peg from the dollar to zero of the stablecoin causing it to plummet.
The price of the LUNA coin fell 99%, triggering legal action against Terraform Labs. As well as potential stricter regulations from regulators, including South Korean lawmakers.
Among all of these, there are question marks about how LFG managed its reserves. With the organization indicating that it spent 80,000 BTC to maintain the UST peg.
The South Korean National Police Agency’s cybercrime unit has asked local cryptocurrency exchanges to freeze assets related to the situation. According to a report from the business news outlet The Bell.
LFG is a South Korean-based cryptocurrency organization that ran the Terra project. The group has been under fire recently for its handling of the reserves during the peg
A piece of information from the LFG on 16 May reveals. That its reserves balance included 39,914 BNB, 313 Bitcoin, and 1,973,554 AVAX as well as more than 222 million LUNA and 1.8 billion UST.
The value of the assets has declined since then, but they are still worth approximately $13 million.
LFG is a South Korean-based cryptocurrency. It is not known if the South Korean authorities have contacted any exchanges outside of the country.
This is a developing story and will be updated as more information becomes available.
I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.
