Terra Allegedly Increased the DeFi of Anchor Protoco Services Due to Insider Trading
Terraform Labs and its affiliated companies allegedly increased the number of their decentralized financial (DeFi) Anchor Protocol services by investing their own capital. The allegation is currently being investigated by the South Korean prosecutor's office, according to state broadcaster KBS.
Local media claims that TerraUSD's largest clients of deposits, loans and collateral services under the Anchor protocol were actually Terraform Labs and its investors.
In particular, KBS reports that the account with the largest number of TerraUSD deposits in Anchor Protocol was managed by Terraform Labs and its foreign investors.
The Anchor Protocol DeFi service offered up to 19.5% annual percentage return to users who deposited the TerraClassicUSD stablecoin, formerly called TerraUSD.
At one point, Anchor Protocol was one of the largest DeFi services, owning 12 billion UST stablecoins in April of this year; KBS says that the figures that the company allegedly overstated helped attract and gain investor confidence in the Terra stable coin and its subsidiary cryptocurrency.
The Seoul Southern District Prosecutor's Office, which is in charge of the investigation, told Forkast that it does not dispute the KBS report. .
Last week, another class action lawsuit was filed in California against Terraform Labs and chief executive Officer Do Kwon, who is accused of misleading investors.
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