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Terra | New Proposal Reaches Minimum Threshold of 40%, Nearly 80% Agree to Fork, New Coin Has an Inflation Rate of Up to 15 Times in Five Years

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Terra | New Proposal Reaches Minimum Threshold of 40%, Nearly 80% Agree to Fork, New Coin Has an Inflation Rate of Up to 15 Times in Five Years

The Terra incident is still ongoing, with more Korean media outlets paying attention to the event and reporting unfavorable news, including Do Kwon and Terraform Labs facing a tax investigation of tens of millions of dollars, the dissolution of the entity before the collapse, a special investigation by the Financial Crime Joint Investigation Team, and the LUNA hard fork proposal reaching the minimum threshold of 40%.

1. New Proposal LUNA Go Forward Proposal

The LUNA hard fork proposal has reached the voting stage. Although the majority of nodes have not yet voted, 34 high-voting-weight nodes have all cast affirmative votes, with a current approval rate of 79.6%. The voting rate of 40.03% has exceeded the minimum threshold of 40%, and the voting will end on 5/25.

The voting situation is completely opposite to the previous governance forum poll, where the fork proposal had an opposing rate as high as 92%.

Andrew Kang, founder of Mechanical Capital, pointed out that the token economy of Terra 2.0 is entirely useless, with its issuance reaching triple inflation in the following year, nine times the next year, and fifteen times the issuance after five years.

Especially in a poor macro investment environment, the market is unlikely to bear such a high issuance.

2. National Tax Service Pursues $78 Million in Taxes

According to the report by South Korean NAVER group, the National Tax Service had previously collected corporate and income taxes of over 100 billion Korean won, equivalent to $78,393,860, from Do Kwon and Terraform Labs TFL, citing this as the main reason for Terra's headquarters moving overseas. They also plan to levy an additional 100 billion Korean won in taxes.

Last June, the National Tax Service conducted a special tax investigation on TFL and found that Do Kwon held 92% of the shares of TFL's Singapore entity, Terra Singapore.

The tax inspection results reported by the National Tax Service at that time targeted Terra Virgin, a subsidiary in the British Virgin Islands, and Do Kwon, imposing 4.66 billion Korean won in income tax, and stated that Luna Foundation Guard LFG was established by Terra Virgin and Do Kwon in Singapore.

Therefore, the National Tax Service also considers the crypto assets sent by Terra Virgin and Do Kwon to LFG for investment in Anchor as other income. As the operational management of LFG established in Singapore actually takes place in Korea, the bitcoins sent by LFG will be considered as donations, potentially subject to an additional 100 billion Korean won in taxes.

3. Dissolution of TFL, Tax Evasion by Seoul Branch?

Rumors about the dissolution of TFL during the collapse have been circulating on Twitter for a long time, and according to South Korean media Digital Today, based on the news from the Supreme Court Registry on 5/13, Terraform Labs Korea decided to dissolve its Busan headquarters and Seoul branch at the shareholder meeting on 4/30.

Both the TFL Korean headquarters and Seoul branch conducted liquidation on 5/4 and 5/6, respectively. According to corporate registration records, Do Kwon is the liquidator, and the timing was before the UST collapse.

This indicates that TFL may have ceased to exist physically during the collapse, and Do Kwon only conveyed strategies through TFL's Twitter account. This move is also seen by NAVER media as an attempt to escape South Korea to evade taxes.

Document Copy｜Supreme Court

4. "God of Death" Joint Investigation Team Established

According to South Korean media SBS, the joint investigation team for financial and securities crimes, known as the "God of Death" on Yoido Island, was reestablished on 5/18, two years after its dissolution, consisting of 48 team members, 7 prosecutors, and employees from the Financial Services Commission FSC and other relevant agencies.

Upon its return, the first case handled by the team is the Terra collapse incident, with a representative stating to SBS:

The Terra incident has caused serious losses to the general public, and we have designated this case as the first one to handle.

Note: Yoido Island is located on the Han River in South Korea and is the location of the Korea Exchange and the Financial Investment Association, serving as Seoul's financial investment center.

5. Law Firm Prepares Lawsuit

According to South Korean Munhwa Daily, the law firm RKB & Partners plans to sue Terra founder Do Kwon for alleged fraud and intends to apply for provisional seizure to temporarily confiscate his assets.

Kim Hyeon-kwon, a partner at the law firm, stated: The firm has investors concerned, and plans to file a lawsuit against Do Kwon with the Seoul Metropolitan Police Agency's Financial Investigation Division.