More Troubles for Do Kwon as S. Korea Levies $78M Tax Evasion Fine
Godfrey Benjamin May 20, 2022 02:57
Terraform Labs is currently being charged with tax evasion fraud by the South Korean National Tax Service, a move that complicates matters for the startup that is trying to salvage its collapsed ecosystem
Terraform Labs is currently being charged with tax evasion fraud by the South Korean National Tax Service, a move that complicates matters for the startup that is trying to salvage its collapsed blockchain ecosystem.
Tax Evasion Charges With Proof
Local news sources claim that investigations into the Terraform Labs startup commenced around June last year. CEO Do Kwon, one of the faces of the project is accused of attempting to liquidate his personal properties in order to relocate the business elsewhere.
Terraform Labs is registered in the Virgin Islands and Singapore, however, for the sake of taxation, the South Korean Taxation Act recognizes companies the management operation is concentrated in the country. For Terraform Labs, a total of 100 billion won, (approximately $78 million) is due for payment.
The investigations revealed that Do Kwon is unpleased with the tax policies of the country, and the broad negligence has attracted a cumulative income tax fine of 4.66 billion won on Terra Virgin and a corporate tax fine of 44.47 billion won.
With many pointers showing Terraform Labs and its affiliated organizations are almost bankrupt, it is not clear how Do Kwon, who owns the majority stake in the company, will navigate the current charges against him.
Will the Current Legal Woes Abate?
Blockchain.News reported earlier that Do Kwon is likely to face fraud charges in South Korea, as an organized group of investors who ended up in losses as LUNA and UST collapsed are taking up legal actions against him.
LUNA is still trading at a negligible price while UST is yet to be re-pegged to the United States dollar. Amongst the proposals Do Kwon has shared to revive the protocol is to fork the current network to a new one that will introduce a new token which will be airdropped to old LUNA and UST investors.
Should the proposal which is currently embroiled in controversy pass, it may be the beginning of a new dawn for the embattled CEO and the Terra community as a whole.
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