South Korean prosecutor has restricted Terraform Labs employees from traveling outside the country pending investigations into the collapse of terraUSD.
Seoul Southern District Prosecutors’ Office has confirmed the ban saying that it targets dozens of current and former Terraform Labs employees.
The probe follows an investigation launched on behalf of 81 investors by a special financial crime unit in May against the firm. The filed documents maintain that Terraform and its founders deceived investors with its defunct algorithmic coin.
The announcement comes after terraUSD collapsed together with the native LUNA token in May amid moves by financial regulators to heighten crypto market regulations.
The collapse of the algorithmic stablecoin caused turmoil in the cryptocurrency space, wiping out retail investors in the sector. BTC price dropped below $20,000 for the first time since November 2020, and about 70% from the ATH as a result.
TerraUSD was unveiled in 2020 as an algorithmic stablecoin pegged to the value of USD. When it deppeged in May, investors lost confidence and exited.