Offices of Upbit and several other cryptocurrency exchanges were raided on Wednesday by a team of investigators probing a fraud case in connection with the collapse of Terraform Labs' sister tokens TerraUSD (UST) and LUNA, according to a report by Yonhap News Agency.

Per the report, the Seoul Southern District Prosecutors Office began seizing transaction records and other materials from Upbit, Bithumb, Coinone, and four other local exchanges around 5:30 p.m local time.

The investigation team reportedly plans to study the seized materials and question witnesses to determine the size of damages suffered by investors and whether Do Kwon, the CEO of TerraLabs, intentionally caused the collapse of the Terra ecosystem.


Investigators also conducted raids on other places, including the homes and offices of individuals involved in the case.

Decrypt has reached out to the mentioned exchanges for comments and will provide an update should we hear back.

Terra collapse

Terra's UST algorithmic stablecoin collapsed after losing its intended peg to the U.S dollar in May along with the LUNA token, resulting in tens of billions of investors’ wealth wiped out from the market.

The implosion of the Terra ecosystem has also attracted regulatory scrutiny around the globe.

The U.S. Securities and Exchange Commission (SEC) is reportedly looking into a possible violation of federal investor protection rules in relation to UST marketing practices, while South Korean authorities launched a separate investigation in May to determine whether intentional price manipulation and other issues could have been behind the UST collapse.


A class-action lawsuit was also brought against Kwon and Terraform Labs in June in the U.S. District Court in Northern California.

As for Kwon himself, the Terraform Lab’s co-founder last month said that he was “devastated” by the collapse of the project.

He also claimed that he had personally lost nearly all his net worth in Terra’s crash, while denying claims that the project was a “fraud.”

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