Do Kwon Calls $78M Tax Investigation By South Korean Authorities ‘Unfair’

Terraform Labs CEO Do Kwon maintained his innocence of any wrongdoing after reports emerged of a possible 100 billion won [$78 million] tax evasion in South Korea. The founder who has been at the center of attention since the UST collapse has denied the allegations slamming the tax collection as “unfair”.

The South Korean government needed money to support the corona [financial] spending and ingeniously charged the cryptocurrency companies millions of dollars [taxes]. We paid our share in full,” he quipped.

Do Kwon was also responding to another allegation that he fled to Singapore to escape from legal prosecution.

“I’ve been in Singapore since last December,” he said. “It’s a personal decision and something I’ve been planning for a long time.”

He also said, “We don’t have that kind of money,” he said in response to an investor’s request to use Terraform Labs’ funds to burn previously issued Luna.

We are willing to respond to any litigation or regulatory investigation to the best of our ability,” he stated. “We have nothing to hide.”

With regards to the dissolution of Terraform Labs’ Korean corporation shortly after the Lunar and UST crash, Do Kwon argued, “The closing of the company (Korean corporation) only took time, and the timing was purely coincidental.”

The Terraform Labs headquarters was established in Singapore and is still active, and [the company’s situation] is in good condition,” Kwon said. “We no longer have a Korean subsidiary.”

Do Kwon’s legal troubles pour in

On 20th May, the Seoul Southern District Prosecutors’ Office said that it has launched an investigation on Terraform Labs, and assigned the case to its Financial and Securities Crime Joint Investigation Team, a special financial crimes unit, a local media reported.

Prior to the announcement, five Korea-based crypto investors who allegedly lost a combined 1.4 billion won [about $1.1 million] filed criminal complaints against Kwon and his Terraform co-founder Daniel Shin accusing the duo of fraud and other violations of financial regulations.

South Korea’s financial authorities estimated that nearly 280,000 users owned a combined amount of 70 billion Luna in Korea.

Further prosecutors are also reviewing whether Terra’s ‘anchor protocol’, which guarantees a 20% annual rate of return when buying and entrusting UST, is a Ponzi scam.