The Supreme Court Registry Office of South Korea highlights about intentional liquidation of two branches of the Terraform Labs by Do Kwon. According to the court proceedings, both the branches at Busan and Seoul were dissolved during a general shareholder meeting held on April 30. Moreover, both the co-founders have been filed against the Ponzi and fraudulent activities by a Korea-based online cafe called Naver Cafe.
In the light of this news, South Korea’s National Tax Service has ordered the founder of Terraform Labs Do Kwon, and other executives to pay a fine of 100 billion won ($78 million) as tax evasion penalties. In the investigation, the two subsidiaries under Terraform Labs were registered in the Virgin Islands and Singapore. While both the entities were registered abroad, the actual working place was South Korea.
As the corporate tax law says that foreign-registered companies will be considered domestic entities of their operations and management within the country. Therefore, both the subsidiaries are required to fulfill tax obligations to the South Korean Government. Whereas the tax liabilities are pending since October 2021, Terraform Labs will have to pay a fine of 44.7 billion won ($34.7 million) in corporate tax and 4.66 billion won ($3.6 million) as income tax for both the Seoul and Busan branches.
As per the reports, Kwon knew about tax evasion and is the main suspect behind the liquidation of the domestic branches in South Korea. Further then, he also tried to liquidate funds of domestic headquarters and shifted his residence abroad just before the calamitous crash of Terra LUNA and UST during this month.
Also read: LUNA plunges to 80% downfall- Do Kwon initiates the Terra recovery plan
More problems for Do Kwon
The tax evasion news is highlighted after the reports emerged about filing of criminal and civil lawsuit actions against Do Kwon by two Korean Investors. An investing company for both the UST and LUNA has filed in the court to seize Kwon’s property, according to Korean news reports.
To add a cherry on top of all the Kwon’s problems, a Korean group ‘Victims of LUNA, UST coins’ having over 1,500 people will be filing a lawsuit against both the co-founders of Terraform Labs. That include both Do Kwon and Shin Hyun-Seong for fraud and raising crowdfunding illegally.
Also read: How these best projects on Terra Blockchain doing after its big crash!