Terraform Labs is reportedly fined $78 million by a South Korean agency for tax violations

Terraform Labs is reportedly fined $78 million by a South Korean agency for tax violations

In the aftermath of the Terra ecosystem’s demise, Terraform Labs and co-founder Do Kwon have continued to face legal challenges. The crypto business has now fallen under the spotlight of the national tax office, following early rumours of a probable congressional hearing and an inquiry by the ‘Grim Reapers’ financial crimes team. According to a

In the aftermath of the Terra ecosystem’s demise, Terraform Labs and co-founder Do Kwon have continued to face legal challenges. The crypto business has now fallen under the spotlight of the national tax office, following early rumours of a probable congressional hearing and an inquiry by the ‘Grim Reapers’ financial crimes team.

According to a Naver news article, South Korea’s national tax department has fined Terraform Labs and its co-founder a total of 100 billion won ($78 million) for tax evasion.

According to the article, the Kwon has been upset with crypto taxation in the country since December and attempted to liquidate Terra’s domestic business immediately before the LUNA meltdown.

Terraform Labs was first investigated by tax officials in June of last year, allegedly for dodging corporate and income taxes. Terraform Labs and its multiple companies were discovered to be registered in both the Virgin Islands and Singapore, according to the study.

Despite the fact that both subsidiaries were registered in another country, the ‘place of actual management’ was South Korea. The place of real management is evaluated for tax purposes rather than the registration country, according to Korea’s company tax laws.

After Terraform Labs transported Luna from Terra Singapore to Luna Foundation Guard (LFG) to dodge taxes or make up for the loss of anchor protocol, the tax authorities were notified.

Terra subsidiaries in the Virgin Islands were fined 4.66 billion won ($3.6 million) in income tax and 44.7 billion won ($34.7 million) in corporation tax earlier this month.

In the aftermath of the LUNA tragedy, South Korean law enforcement agencies and policymakers have pounced on Do Kwon and his friends. After 2.5 years, the “Grim Reapers of Yeouido,” a special financial crime investigative unit, was called back to look into the project.

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