Crypto News

South Korean Prosecutors Launch New Investigation Into Terraform Labs: Report

While the Terra/UST $60 billion fiasco seems to be progressively dying down, South Korean prosecutors have revealed plans to launch a recent investigation into the agency and its executives.

According to a latest report by the Korean Herald, the Financial and Securities Crime Joint Investigation Team of the Seoul Southern District Prosecutors Office has met with a number of crypto specialists and monetary regulators to evaluation Terra tokens.

Terra Tokens Could Be Securities 

Per the report, Korean prosecutors purpose to find out whether or not to categorize Terra’s digital property below securities, together with its native token, LUNA. For the longest time, monetary regulators have been working to find out which crypto property are categorized as securities and non-securities. 

While a number of specialists argue that cryptocurrencies are securities since they are often issued like shares, others imagine they need to be categorised as a commodity on account of their decentralized traits.

If Terra tokens are decided to be securities within the investigation, TerraForm Labs, its founder Do Kwon, and different executives will likely be charged with violating the Capital Market Act.

The agency and its executives are going through fraud and tax evasion prices leveled in opposition to them following the UST debacle earlier in May, ensuing within the lack of over $60 billion in traders’ funds.

The newest investigation comes as a part of efforts by South Korean prosecutors to widen their probe into Terraform Labs and its co-founders relating to the cataclysmic collapse of LUNA and UST.

Korean authorities have scrutinized a number of people and entities associated to the Terra case. Earlier in July, the prosecutors raided the home of Terraform Labs’ co-founder, Daniel Shin, as a part of ongoing investigations. 

According to folks conversant in the matter, the prosecutors’ new choice would additionally assist policymakers develop the nation’s authorized framework for crypto regulation.

U.S. SEC Expands Probe into Terra

As per the report, the United States Securities and Exchange Commission (SEC) can also be increasing the scope of its investigations into Terraform Labs. 

The agency’s DeFi platform, Mirror Protocol, is at present below the SEC radar for promoting mirrored property Netflix and Tesla shares in UST.

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