South Korea Slams Terra’s Do Kwon With $78M Fine for Tax Evasion: Report

According to reports, the South Korean National Tax Service has ordered Terraform Labs’ co-founder Do Kwon and other executives to pay a fine of 100 billion won ($78m) for tax evasion penalties.

The Genesis

Local reports claim that the tax agency launched an investigation into Terraform Labs in June 2013 to look into suspicions of income and corporate tax evasion.

Two subsidiaries of the company were found to be registered in Singapore and the Virgin Islands. Despite having foreign registrations, the actual management of the companies was in South Korea.

Corporate tax laws in the country treat foreign-registered businesses as domestic entities, if they are managed and operated in the country. Therefore, Terraform Labs subsidiaries must comply with tax obligations to the Korean government.

The tax authorities in October ordered Terra’s Virgin Islands subsidiary to pay a penalty of 44.7 billion won ($34.7 million) for corporate tax and 4.66 million won ($3.6 million), for income tax.

Korean Tax Agency suspects tax evasion

According to the report, Do Kwon was dissatisfied by the country’s tax laws in December 2013. Do Kwon then attempted to liquidate the company’s headquarters in the country and move abroad shortly before the devastating Terra LUNA crash earlier in the month.

Terraform Labs sent LUNA Terra to the LUNA Foundation Guard in Singapore during the UST drama. This may have been to reimburse anchor protocol for their losses. The tax authorities found the move suspicious and concluded that the company was trying evade taxes.

Do Kwon is the subject of more law suits

Just 24 hours after Do Kwon was accused of committing criminal and civil acts, the $78 million tax penalty was announced. According to reports, UST investors and LUNA investors want Kwon’s assets taken by the court.

Another Korean group, “Victims Of Luna, UST Coins”, plans to file a class-action against Do Kwon, Shin Hyun-Seong, co-founders of Terra, for fraud and illegal crowdfunding.

Read More

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Close Bitnami banner
Bitnami