US media including Bloomberg reported on the 23rd (local time) that the US prosecutors formally indicted Kwon Do-hyeong, CEO of Terraform Labs, who caused a stir in the global cryptocurrency (virtual currency) world.
◇ New York Prosecutor’s Office formally indicted
: On this day, the New York prosecutor’s office formally indicted Mr. Kwon on charges of violating the Securities Act.
The indictment follows news that he has been arrested in Montenegro, Eastern Europe. Previously, he was known to have been caught using a counterfeit passport at an airport in Montenegro, Eastern Europe.
U.S. prosecutors indicted him on eight charges, including securities fraud, product fraud, and wire fraud. Earlier, the Securities and Exchange Commission (SEC), the US securities authority, also formally sued him about a month ago.
Attorney Kim Jong-bok (center) of LKB&Partners, a law firm, is receiving complaints and complaints on behalf of victims of Terra and Luna virtual assets as a joint financial and securities crime investigation team at the Seoul Southern District Prosecutor’s Office in Yangcheon-gu, Seoul on the 19th. 2022.5.19/News 1◇ US investors also suffered huge losses
: The reason why the US immediately prosecuted Kwon upon news of his arrest is that US investors also suffered tremendous damage from the Terra incident.
A spokesman for the New York prosecutor’s office said, “We will extradite him to the United States for investigation.”
In May of last year, Mr. Kwon caused a ‘Terra Run’ (Terra avoidance phenomenon), which shocked the global cryptocurrency market.
When UST, a stablecoin issued by Terra, plummeted by 70% and sister coin Luna by 95%, cryptocurrencies around the world collapsed simultaneously.
Experts estimate that the cryptocurrency world lost at least $40 billion (about 52 trillion won) in the Terra crisis. Since then, Bitcoin has not been able to recover its former majesty until now.
◇ It is not easy to prove criminal responsibility
: But it is unlikely that he will be sentenced to prison, experts say.
CNBC, an economic media outlet, reported, citing experts, “In order to hold criminal responsibility, evidence that Mr. Kwon and his colleagues intentionally deceived investors is needed, but it will not be easy to prove this.”
However, civil liability is different. Because there are obviously victims. Kwon can avoid criminal liability, but CNBC predicted that there is a high possibility of losing a civil lawsuit and paying an astronomical fine.
Korean victims have already filed a lawsuit against Kwon and Terraform Labs for damages. There is a similar movement in the US.
Experts estimate that the Terra debacle cost the cryptocurrency world at least $40 billion. As a result, the fines are expected to be huge.
Source: Donga
Mark Jones is a world traveler and journalist for News Rebeat. With a curious mind and a love of adventure, Mark brings a unique perspective to the latest global events and provides in-depth and thought-provoking coverage of the world at large.