South Korean prosecutors have reportedly identified what is believed to be a Terraform Labs subsidiary in South Korea, FLEXE Corporation, which was allegedly used to facilitate cash flow from overseas to Terra affiliates, according to KBS News.

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Fast facts

  • Terraform Labs chief executive officer (CEO) Kwon Do-hyung, otherwise known as Do Kwon, is listed as the only internal director of FLEXE Corporation, according to KBS.
  • The broadcaster reported that the subsidiary was a non-operative paper company after visiting the registered address to discover the company did not have a physical presence at the building. 
  • Prosecutors have reportedly identified cash flows worth 6 billion Korean won (about US$4.5 million) and 12 billion won (US$9 million) coming from Terra’s Singapore base, passed through its office in the British Virgin Islands, before reaching FLEXE in South Korea and other Terra affiliates.
  • KBS suggested the subsidiary was used as a channel to receive funds from liquidated cryptocurrencies, and added that a former Terraform Labs employee claimed FLEXE caused issues in a special tax audit on the company last year.
  • A prosecutor at the Seoul Southern District Prosecutors’ Office was not able to confirm nor deny to Forkast the allegations related to the ongoing probe, while Terraform Labs and Kwon did not respond to Forkast by press time.
  • Local media reports dating back to February suggest Terraform Labs was not actively concealing the existence of FLEXE. 

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