South Korean Authorities Turn the Heat on Terra, Do Kwon Faces $78 Million Fine For Tax Evasion
2022.05.19 14:42
South Korean Authorities Turn the Heat on Terra, Do Kwon Faces $78 Million Fine For Tax Evasion
Since the Terra ecosystem crash, the challenges faced by Do Kwon and his Terraform Labs have been coming in thick and fast. The project and its founder have now been charged with tax evasion.
Terra to Pay $78 Million in Taxes
Just days after the legal team of Terraform Labs jumped ship, Do Kwon was reportedly ordered by South Korea’s National Tax Service to pay 100 billion won (approximately $78 million) in taxes.
According to South Korean news agency Naver, the tax authorities of South Korea found Terra’s parent companies, The Ancore Company and Terraform Labs, guilty of evading corporate and income tax.
Terraform Labs Evaded Taxes Using Singapore as Cover
According to the report released by authorities, Terraform Labs had sent LUNA from its Singapore-established entity to the Luna Financial Guard (LFG).
South Korea’s National Tax Service concluded that the movement of funds to LFG was done in order to evade taxes.
Although LFG and Terraform Labs were established in Singapore, South Korean tax authorities ruled that their “place of actual management” subjects them to pay taxes in the country.
On the Flipside
- In a breath of fresh air for Terra, 78% of votes cast by the network validators favor the hard fork of the Terra chain.
Why You Should Care
The tax evasion charges filed against Terra only add more pressure on a project already under intense duress from its ecosystem collapse.
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