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Terraform labs and cofounder do kwon continue to attract more legal problems following the collapse of the terra ecosystem. After early reports of a possible congressional hearing and an investigation from 'Grim Reapers' financial crimes unit, the crypto firm has now come under the radar of the national tax agency.
According to a report published in Naver news, South Korea’s national tax agency has slapped the Terraform Labs and its co-founder with a 100 billion won ($78 million) penalty for tax evasion charges.
The report highlighted that the Kwon was unhappy with crypto taxation in the country since last December and tried to liquidate Terra’s domestic operations just before the infamous LUNA crash set in.
Terraform laboratories were reportedly first caught by the tax authorities in June of last year over suspicions of corporate and income tax evasion. The investigation into the terraformels and its various subsidiaries revealed that the company was registered in the virgin islands as well as in Singapore.
Related: Analysts assess the aftermath of the Terra (LUNA) collapse
Even though the two subsidiaries were registered overseas, the "place of effective management" was South Korea itself. According to the Korean Corporate Tax Act, the place of actual management is considered for tax purposes as the registered country.
Tax authorities were alerted after terraforms laboratories sent luna from terra singapore to luna foundation guard (lfg) to avoid taxing or offset anchor protocol losses.
Earlier in October, terra Virgin Islands affiliates were fined 4.66 billion won ($3.6 million) in income tax and 44.7 billion won ($34.7 million) in corporate taxes.
South Korea's law enforcement and political leaders put pressure on Do Kwon and his associates the day after the lunar crash. A special financial crime investigation unit called "yeouido reapers" was recalled after 2.5 years to examine the project.
