Stablecoin Terra's dramatic collapse last month resulted in the South Korean government taking a closer look at the ill-fated project. On Tuesday, Seoul decided to block Terraform Lab's current and past employees from exiting the country, effectively confining them to the Asian country where they might await prosecution.
Approximately 15 people are facing travel restrictions, according to local South Korean media.
Some disgruntled ex-employees took to social media to gripe about the newfound restrictions:
Prosecutors confirmed with Bloomberg that travel restrictions were in place for Terraform Labs' employees. “Departure bans are normally imposed to have them included for questioning,” an individual told Bloomberg.
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Terraform Labs co-founder Do Kwon holds a South Korean passport, but is believed to be in Singapore and not among the fifteen individuals named in the travel blacklist.
However, local South Korean media said that Kwon might be required to forfeit his South Korean passport within 14 days to comply with the ongoing investigation. There is also a possibility that Kwon might face seize and search warrants related to his role in the algorithmic stablecoin's collapse.
The stablecoin faced a loss of approximately $40 billion from its total market value after it "de-pegged" from its sister coin, Luna. The Securities and Exchange Commission in the U.S. is currently evaluating whether the company violated regulations around investor protections.