A new phase of the ‘Terra Luna’ investigation… Court seems to recognize securities
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With the US Securities and Exchange Commission (SEC) recognizing the securities properties of Terra Luna, which caused controversy due to the crash, it is highly likely that virtual assets will be punished under the Capital Market Act for the first time in Korea.
According to the legal community on the 19th, on the 16th of this month (local time), the SEC indicted Terraform Labs, the issuer of Terra and Luna, and Dohyeong Kwon, the company’s co-founder, in the New York Federal District Court on charges of fraud under the Securities Exchange Act.
In the indictment, the SEC said, “Mr. Kwon sells interconnected digital assets, and many of the billions of dollars he raised from investors are unregistered securities.” billion),” he said.
What is noteworthy is that the SEC, a quasi-judicial body in the United States, has officially recognized the securities properties of Terra and Luna. This is expected to be the basis for punishing Terra and Luna for violating the Capital Market Act in Korea.
The Korean prosecutors requested an arrest warrant for Kwon and others on charges of violating the Capital Markets Act in October of last year, but the court dismissed the request, saying, “There is no clear data as to whether the two coins are securities.”
Regarding this, an official from the legal profession said, “At the time, there was no precedent for the court to recognize the securities nature of a specific coin, so it must have been a conservative approach.” This means that we have a basis for identifying the alleged violation of the market law.”
The prosecution will secure a strong basis to prove the ‘securitity’, which is the key to the success or failure of the investigation, and is expected to gain more momentum in proving the charges. On the 31st of last month, the Seoul Southern District Prosecutor’s Office’s joint investigation team for finance and securities crimes, etc., went to Serbia to request cooperation in the investigation to secure a new case for Mr. Kwon. Prosecutors are expected to speed up securing new recruits for Mr. Kwon.