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Terraform labs, the company behind LUNA and UST has accused South Korean prosecutors of overstepping their authority and hampering the basic rights given to a citizen under Korean law.
The company presented their defense in a statement, two weeks after they issued a warrant for Do Kwon, who co-founded the company in 2018 and has served as CEO since. A spokesperson for the company said that since Luna wasn’t a security, it isn’t covered by South Korea’s capital-markets law.
Raising an argument, he said in a statement “We believe that this case has become highly politicized and that the actions of the Korean prosecutors demonstrate unfairness and a failure to uphold basic rights guaranteed under Korean law,”
Arrest Warrant for Kwon
Do Kwon recently said on Twitter that “zero effort to hide. I go on walks and malls”, suggesting that he isn’t taking any precautions to hide from the authorities. Adding to that, he said “I’m writing code in my living room,” and that he had not seen his name on Interpol’s red notice list.
“For something that has notice in the name, it sure gives no notice,” was his comment.
This was after the Seoul Southern District Prosecutors’ Office received an arrest warrant for Kwon, who is believed to have lived in Singapore since the Luna crash. And mentioned the same location on his Twitter page. However, the Singapore police confirmed that he wasn’t present in the state and that his whereabouts are unknown.
The spokesperson at the firm mentioned that Kwon’s residence has been exposed to attempted break-ins and therefore has refused to share his location saying “Do Kwon’s location has been a private matter for months due to ongoing physical security risks to him and his family,”
Earlier this week, the South Korean prosecutor said that they’d received a red notice for Kwon from Interpol, putting authorities all over the world on the lookout for the CEO. Kwon, however, said that he did not see his name on Interpol’s list. But that’s an unreasonable statement as not all the names on the red notice list are made available to the public.
The prosecutor’s office said in a statement to the Wall Street Journal that it wouldn’t respond to “every unilateral claim made by the fleeing suspect.” And suggested that Mr.Kwon appearing before the prosecution as soon as possible to disclose his position and corporate with the investigation would be ideal.
The spokesperson at the Singapore-based firm said that the law wouldn’t apply to Mr Kwon as Luna is not a security. And therefore, he and his firm didn’t do anything illegal.
“We believe, as do most in industry, that Luna Classic is not, and has never been, a security, despite any changes in interpretation that Korean financial officials may have recently adopted,” Terraform Labs’ spokesman said.
This argument is based on the unclear realization of the asset class that cryptocurrencies fall into. Which has been a concerning matter of discussion around the world.
So far, the prosecutor hasn’t cleared the air around whether or not they know of Mr Kwon’s whereabouts but has mentioned looking for him in a statement that read. “Locating and arresting someone is tricky. The situation changes every time. We’re doing our best to get him,”
Kwon is soon expected to be found as authorities around the world are attempting to locate and apprehend him. The accusation has been made by the Seoul prosecutor of financial fraud and violation of South Korea’s capital market laws.
The Beginning Of It All
This year, investors in the crypto space bore witness to one of the biggest losses in the history of cryptocurrency, known to be triggered by Terra Luna. The loss is suggested to have wiped out more than $300 billion from the industry’s value while managing to erase $40 billion from Terra’s ecosystem.
LUNA and UST were two coins of the ecosystem, algorithmically linked to each other. And the UST, paired 1:1 to the dollar maintaining an average price of $1.
A massive sell-off triggered a sudden liquidation of the tokens, beginning the price of UST down by 10%, while LUNA remained unaffected. Naturally, seeking to make some profit, investors swapped their tokens for LUNA, which then affected the entire value of the coin.
The once $40 billion market cap coin soon fell to a price well below a fraction of a cent, while the total supply increased to more than 6.5 billion from roughly 342 million a few days before the crash.
The CEO then launched a new coin called Terra LUNA, while the original coin was rebranded as LUNC. This new coin wasn’t linked to any stablecoin and attempted to repair investors’ faith in the cryptocurrency.
The coin is currently trading at $2.5, with a market cap of over $300 million.
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