Just days after Terraform Labs’ legal staff jumped ship, Do Kwon, Terra’s creator, was reportedly ordered by South Korea’s National Tax Service to pay 100 billion won (approximately $78 million) in taxes.
Since the network’s downfall, the CEO has been under fire. He has, however, outlined several strategies for resurrecting the Terra Chain. According to South Korean news portal Naver, the tax authorities in South Korea found Terra’s parent companies, The Ancore Company and Terraform Labs, guilty of evading corporation and income taxes.
According to the authorities’ findings, Terraform Labs transmitted LUNA from its Singapore-based corporation to the Luna Financial Guard (LFG). The South Korean National Tax Service determined that funds were shifted to LFG to avoid paying taxes.
Despite the fact that LFG and Terraform Labs were created in Singapore, tax officials in South Korea concluded that they were required to pay taxes in the country due to their “place of actual management.” Earlier, a South Korean lawmaker raised his voice to summon Kwon to investigate the Terra crash.
In less than a week, Terra LUNA, a cryptocurrency with a market cap of almost $40 billion, plummeted. According to the story, the National Tax Service recently informed Terra’s creator, Terraform Labs, and other executives that they must pay a 100 billion won fee. However, the IRS began a special tax investigation into Terra’s parent company in June 2021.
According to the report, CEO Kwon owns 92 percent of Terra Singapore. While Chai Corporation’s CEO, Daniel Shin, who previously denied any connection to Terra, owns around an 8% interest. Meanwhile, Chin is named in the report as a registered director of the corporation.
Terra Virgin was penalised 4.66 billion won (about $3.64 million) in income tax following an investigation by the South Korean Tax Agency in October. The corporation was also hit with a corporate tax of 44.47 billion won ($34.7 million). The Terra established the Luna Foundation Guard (LFG) to avoid paying taxes, according to the tax authorities.
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