Terraform Labs and affiliates allegedly ramped up the numbers of its decentralized finance (DeFi) service Anchor Protocol by investing their own capital, a claim that South Korean prosecutors are currently looking into, state broadcaster KBS reported.
See related article: S.Korea slaps ‘notification upon arrival’ on Terra’s Do Kwon
Fast facts
- The local media outlet claims the largest customers in TerraUSD deposits, loans and collateral services on Anchor Protocol were in fact Terraform Labs and its investors.
- More specifically, KBS says the account with the most TerraUSD deposits in Anchor Protocol were managed by Terraform Labs and its overseas investors.
- The Anchor Protocol DeFi service offered up to 19.5% annual percentage yield to users who deposited TerraClassicUSD stablecoin, formerly TerraUSD.
- Anchor Protocol was among the largest DeFi services at one point, holding 12 billion UST stablecoins in April this year; KBS says the numbers the company allegedly inflated contributed to attracting and gaining trust from investors in Terra’s stablecoin and sister cryptocurrency.
- The Seoul Southern District Prosecutor’s Office in charge of the investigation told Forkast that they do not dispute the KBS report.
- Terraform Labs had not yet responded to Forkast’s request for comment at the time of publication.
- Last week, another class action lawsuit was filed in California against Terraform Labs and chief executive officer, Do Kwon, who is accused of misleading investors.
See related article: Terra subsidiary used as funds channel for overseas affiliates: report