Terraform Update: Tax Authorities Slap Firm With $78 Million Fine
Categories: Crypto News US
The woes continue to pile on for Terraform Labs following LUNA’s unceremonious collapse and UST completely depegging from the US dollar. Now, a local report suggests that South Korean tax authorities are slapping the firm with a US$78 million fine for tax evasion.As a class action lawsuit looms in the background, local tax authorities have claimed that Terraform Labs sent LUNA from its Singapore-based entity to the Luna Financial Guard (LFG) in order to avoid taxes. Furthermore, it is alleged that additional taxes are owed in relation to the bitcoin that was acquired and later sold by LFG. Terraform Labs Used Complex Legal Structures Terraform Labs reportedly first piqued tax authorities’ interest in June last year on suspicions of income and corporate tax evasion. The investigation into the firm and its subsidiaries revealed that the company was registered in the Virgin Islands, as well as Singapore. Since decisions were being made from South Korea, the firm was fined US$3.6 million in income tax and US$34 million in corporate tax. Limited Remedies Available With a congressional hearing on the cards, a lawsuit and a massive tax bill, the future is looking dim for Terraform Labs. For all the talk of decentralisation and building communities, it’s difficult to avoid the conclusion that Terraform was a company centrally controlled by its founder.