The supervisory authority of South Korea fined Terraform Labs $ 78 million for tax evasion.
Do Kwon continues to attract problems. In addition to the crisis of the Terra ecosystem and the difficulties associated with it, problems related to the laws of South Korea have been added to the list of troubles.
South Korea’s tax agency imposed a fine of $78 million or 100 billion won on Terraform Labs and its co-founder for tax evasion charges, writes Naver . The report highlights that Kwon was unhappy with the taxation of cryptocurrencies in South Korea. Since last year, he has been trying to nullify Terra’s internal operations.
According to South Korea’s corporate taxation laws, companies registered abroad are treated as local if the decision-making process and operations are carried out from the country. Consequently, Terraform Labs and its subsidiaries are legally required to fulfil tax obligations to the Korean government.
Terraform Labs first attracted the attention of tax authorities in June last year. Terraform Labs was suspected of evading corporate and income tax payments. The investigation revealed that the company was registered not only in Singapore, but also in the Virgin Islands. As a result of the investigation, Terra’s subsidiaries in the Virgin Islands were fined $3.6 million, or 4.66 billion VN, in income tax and $34.7 million in corporate tax.
Today’s $78 million fine from the tax authorities may not be Kwon’s only legal problem, as the South Korean government revives the dormant Grim Reapers of Yeoui-do to investigate the fall of Terra. Under the group’s close scrutiny are Do Kwon, Shin Hyun Son, as well as the core members of the Terra team.
For the first time in 2.5 years, representatives of various financial regulators will unite in a Special investigative and prosecution group, which is designed to look into securities fraud and unfair trading schemes. In the period from 2013 to 2020, the special group carried out 346 arrests in 965 case.
A team spokesman told SBS News that “the Terra case has caused serious damage to ordinary citizens, which prompted us to designate this as the first investigation.”
Unfortunately, we haven’t heard good news related to the Terra ecosystem and its creator for a long time. Now Do Kwon is being criticized by the community, experts working with cryptocurrency and has problems with the state authorities of South Korea, all of this is putting a stain his reputation, which is vying for investors to the project under his leadership.