The effects of the Terra ecosystem collapse continue. The allegations against Terraform Labs and its affiliates, which are facing various investigations, are multiplying. Most recently, South Korean state broadcaster KBS has reported that Anchor Protocol has been accused of inflating Terra’s volume.
Terra Keeps Giving Up Anchor’s Headache!
The collapse in the Terra ecosystem drove many companies into bankruptcy. Before this collapse, Terra, which boasted the “highest trading volume” on the DeFi platform, had approximately 250 thousand South Korean investors. According to KBS, the largest of these investors in TerraUSD deposits, loans and collateral services in Anchor Protocol actually include Terraform Labs and its affiliates.
In the case of “bloating”, which South Korean provincial prosecutors are also investigating; It is stated that the numbers are self-inflating to gain investors’ trust in the ecosystem’s stablecoin and local cryptos. The most important situation supporting the event is that Anchor Protocol has brought up to 19.5 percent APY to TerraUSD deposits.
In the reports of KBS; “It turned out that a significant portion of this service is maintained by Terra’s ‘self-investment’. After examining the customer list, it was determined that the customers who used Terra’s deposits, loans and collaterals the most were none other than Terra and Terra’s investors.” details were included.
Alongside state prosecutors investigating these allegations, another class action lawsuit has been filed in the US alleging that Terra CEO Do Kwon and other investors inflated the price of crypto.