Terra (LUNA) Parent Reportedly Laundered $4.8M Through Shell Company

Terraform Labs, the company behind Terra LUNA/USD, has reportedly laundered $4.8 million through a South Korean shell company.

What Happened: According to a report from South Korean publication KBS News, a former developer at Terraform Labs told the publication that Terraform Labs had ties to a “blockchain consulting firm K” based in Seoul.

The employee said that "Company K" was “operated under a borrowed name by Terra.”

The office staff also reported that their workspace was named “Terra” in the building’s floor plan, but has since been removed.

The report also states that the National Tax Service uncovered a transfer of 6 billion won or $4.8 million sent from Terra to Company K, reported as “other expenses.” The company’s officials denied all allegations that it was affiliated to Terra in any way.

Hey, that looks just like the Terra sites! Because they're made by exactly the same people. Kernel Labs has received no online coverage in the West, and KBS omitted the name - a lesser-known Korean news site covered the link but went under the radar. https://t.co/BjsyQVqImn (6/8)

— FatMan (@FatManTerra) May 30, 2022

A deeper analysis from Terra Research Forum’s FatMan links Company K to Kernel Labs, an entity allegedly established by the same creators of Terraform Labs.

Now, TFL is trying to furiously scrub away their link to Kernel Labs. On May 18th, mentions of Anchor/Mirror from Kernel's site were removed. In the T2 proposal, Do hastily removed the mention, despite implying that they were partnered in the creation/maintenance of Terra. (7/8) pic.twitter.com/NfQX11qAZ8

— FatMan (@FatManTerra) May 30, 2022

FatMan also shared screenshots of Terra’s T2 proposal, which mentions Terraform Labs and Kernel Labs as the same entity. Any mention of Kernel Labs in the T2 proposal has since been removed.

Update: Korean tax officials have released a statement confirming my initial deduction that Kernel Labs is being used for laundering/evasion - they disclosed that they fined TFL for tax evasion last year due to suspicious transactions with Kernel Labs.

— FatMan (@FatManTerra) May 31, 2022

Korean tax officials have reportedly confirmed that they fined TFL for tax evasion after flagging suspicious transactions to Kernel Labs.

See Also: Terra (LUNA) Founder Do Kwon Faces $78M Fine For Tax Evasion

Last month, Terra founder Do Kwon refuted all allegations in relation to tax evasion on his part or by Terraform Labs.

Price Action: According to data from Benzinga Pro, LUNA was trading at $6.32 at press time, down 11.7% over the last 24 hours. Bitcoin BTC/USD was trading at $29,800, down 5.66% and Ethereum ETH/USD was trading at $1,813, down 6.34% over the same period.