Party government, virtual asset policy meeting on the 24th
The ‘Yeouido Grim Reaper’ joint financial and securities crime investigation team (Hapsudan), which has recently revived the lawsuit case related to the collapse of the Korean virtual currency Terra and Luna, has been taken over.
The Seoul Southern District Prosecutors’ Office announced on the 20th that it had allocated a case in which investors sued Kwon Do-hyung, co-founder of Terraform Labs and Shin Hyun-seong, chairman of Timon’s board of directors, on charges of fraud and similar reception on the 19th. The merger was abolished in January 2020, but was re-established at the Seoul Southern District Prosecutors’ Office on the 18th, two years and four months following Han Dong-hoon took office as Minister of Justice. This case is the first case to be allocated.
An official from the Seoul Southern District Prosecutors’ Office said, “The prosecution will directly investigate the case if the amount of damage is more than 500 million won.”
Prosecutors are said to be considering whether to apply fraud charges to Chairman Kwon and Chairman Shin. In order to maintain the price of Terra and encourage purchases, Terraform Labs gave investors an interest of up to 20% per year in coins instead of receiving Terra when the price fell. It has been pointed out that this method is similar to a Ponzi scheme that takes money from new investors and pays interest or dividends to existing investors.
On the 19th, CEO Kwon announced on Twitter that he would hold a vote to issue new Terra and Luna coins. The plan is to change the existing Terra and Luna coins to Terra Classic and Luna Classic, respectively, to issue new Terra and Luna coins on a new blockchain, and to distribute them to existing holders. Voting is only available to those who have Terra ecosystem coins.
However, individual investors are protesting, saying, “The new coin also has high uncertainty and only delays compensation for damage.” On the 19th (local time), Konstantin Voikoromanovsky, CEO of Allnose, one of the validators who verify the Terra blockchain transaction process, said, “The entire processing process surrounding this proposal is dictatorship,” he said.
There is a growing consensus among the authorities of major countries that virtual assets should be regulated. According to Archyde.com, on the same day, finance ministers and central bank governors from the seven major countries (G7) drafted a joint statement, saying, “Considering the recent turmoil in the virtual asset market, the G7 (20 major countries, under the G20) will have the Financial Stability Board (FSB) We urge the rapid development and implementation of consistent and comprehensive regulations.” The party also decided to hold a policy meeting with the virtual asset industry on the 24th to respond to the collapse of Luna and Terra.
By Nam Gun-woo, staff reporter woo@donga.com
Reporter Kim Ja-hyun zion37@donga.com
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