Media: South Korean regulator fined Terraform Labs $78 million

The South Korean tax authorities have set their sights on sinking Terraform Labs and its co-founder Do Kwon.

Terraform Labs and its co-founder Do Kwon were fined 100 billion won ($78 million) by South Korea's National Tax Agency, according to a report published by local publication Naver, on charges of tax evasion. Earlier it was reported that the company attracted the attention of the supervisory authorities of South Korea amid the collapse of LUNA and UST.

The publication notes that Kwon was unhappy with the taxation of digital currencies in the country and tried to liquidate Terra's internal operations shortly before the collapse of LUNA. 

Terraform Labs first came to the attention of the tax authorities in June last year - the company was suspected of corporate and income tax evasion. The tax authority examined the documents of the company and its subsidiaries, and found out that Terraform was registered not only in Singapore, but also in the Virgin Islands.

According to South Korean law, companies are taxed at the place of actual management. Although Terraform's subsidiaries were registered overseas, they were managed from South Korea. At the same time, Terraform repeatedly transferred LUNA from Terra Singapore to Luna Foundation Guard in order to avoid taxation and compensate for the loss of the Anchor protocol.

Recall that earlier, against the backdrop of the collapse of UST, Terraform Labs left most of the team of lawyers, leaving all the legal affairs of the company to a third-party firm.