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The Singapore police have confirmed they are not investigating Singapore-registered firm Terraform Labs and its South Korean founder Kwon Do Hyeong, 30, after a police report was lodged against them by a "concerned citizen" here.

The Straits Times reported that the police confirmed a report has been made.

But the police did not confirm that they are investigating the company.

ST said it understands the police are not investigating.

What police report said

The complainant claimed that more than 1,000 Singaporeans have invested in UST and Luna.

The report to the police, which contained the address of Terraform Labs, said it was to "seek justice for all those who have lost money".

About Terraform Labs and their coins

Terraform Labs, the driving force behind the Terra blockchain, was co-founded in 2018 by Kwon, better known as Do Kwon, and American citizen Daniel Hyunsung Shin.

An Accounting and Corporate Regulatory Authority record showed the firm in Singapore had a paid-up capital of S$12, ST reported.

The price of both TerraUSD (UST) and its partner cryptocurrency coin Luna collapsed as a result of a bank run by holders and selling pressure.

The coins were launched in 2018.

Both coins are part of the Terra blockchain.

UST, also referred to simply as Terra, was touted as a stablecoin pegged to the United States dollar using an algorithm.

Prior to the crash, Luna was on a massive run, up more than 1,000 percent over six months.

How UST and Luna was supposed to work

The way the coins functioned was touted as a perpetual wealth machine.

Terra is supposed to be trade reliable at the value of exactly one U.S. dollar.

It got depegged on May 9.

The fall in value caused panic selling and instability.

It then plunged to 29 cents by May 11 morning.

They are now trading at fractions of a penny.

The two tokens are supposed to act as a balancing mechanism for each other.

One is automatically created or destroyed based on the supply and demand of the other.

While Terra should always be at US$1, Luna is allowed to rise and fall with the markets.

The coins could freely be exchanged for each other for small profits.

Due to the creation and destruction process, there were about 725 million Luna coins, which have now exploded to about 7 trillion, rendering them worthless.

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