Luna and Terra investors sue Kwon Do-hyung… It seems to be the first case of the Hap Sudan

5 people, 1.4 billion won… Prospects of additional domestic and international lawsuits
Proof of fraudulent intent and application of similar reception law

Lawyers of LKB (LKB) & Partners are heading to the prosecutor’s office to file a complaint against Kwon Do-hyung, CEO of Terraform Labs, in front of the Seoul Southern District Prosecutors’ Office in Yangcheon-gu, Seoul on the afternoon of the 19th. yunhap news

Investors who suffered losses from the collapse of the Korean cryptocurrency Luna and TerraUSD (UST) sued the prosecution against Do-Hyung Kwon, CEO of Terraform Labs, the issuer. It is expected that this will be the first case investigated by the Seoul Southern District Prosecutor’s Office’s Joint Financial and Securities Crime Investigation Team, which was revived with the inauguration of Justice Minister Han Dong-hoon.

On the 19th, LKB & Partners (LKB), a law firm representing investors, sued CEO Kwon, co-founder of Terraform Labs, Hyun-seong Shin, and Terraform Labs Corporation with the Seoul Southern District Prosecutors’ Office on charges of fraud and violating the Act on the Aggravated Punishment of Specific Economic Crimes. announced that he had filed a complaint.

LKB Attorney Kim Hyun-kwon said, “There were a lot of victims, and we made a complaint and accusation because there were a lot of victims and we can only get evidence when an investigation is carried out quickly at the beginning of the case.” Inquiries for additional delegation are continuing,” he said. Financial authorities estimate that there are 280,000 Luna and Terra USD holders. LKB also plans to carry out a foreclosure seizure of CEO Kwon.

It is also known that LKB initially considered filing a complaint with the Financial Crimes Investigation Unit of the Seoul Metropolitan Police Agency. Regarding the reason for choosing the Seoul Southern District Prosecutor’s Office rather than the police, Kim said, “(This case) is an area that requires expertise, and (the Seoul Southern District Prosecutors’ Office) has shown (professionalism) enough to be called ‘Yeouido Grim Reaper’ in the past. because,” he said. An official from the Seoul Southern District Prosecutors’ Office said, “The case will be distributed tomorrow (the 20th).” “After examining the facts of the crime and determining whether the case falls within the prosecution’s investigation authority, we will decide whether to investigate (directly).”

Whether ‘coin = similar receiving product’ is the key

The reason LKB accused Kwon of fraud in the complaint/indictment letter was that △there was a flaw in the design of the business structure and the founders were aware of it △the price of cryptocurrency was not maintained due to such flaws △white paper (including unlimited expansion of Luna issuance) I heard that there was a violation of the business plan). The reason for arguing that it is a quasi-receiving act was that if you entrust teraUSD to ‘Anchor Protocol’ rather than a licensed financial institution, you can receive 20% interest per year.

Lawyer Kim said, “In order to pay 20% interest, new investment had to be made continuously, and to overcome (this structure), a pseudo-receipt or Ponzi scam was used. said.

The legal community and the virtual asset industry regard the investigation as the key to whether it can prove fraudulent intent and whether the coin can be viewed as a similar recipient.

Yoon Seong-han, secretary general of the Korea Blockchain Association, said, “Algorithmic stable coins such as Luna and Terra USD are pilot trials in the industry. There won’t be,” he said. Attorney Jong-goo Lee of Kim & Chang said, “It may be controversial to apply the ‘funds’ stipulated in the quasi-receipt law to coins beyond existing cash or securities.”

On the other hand, a legal official said, “It is difficult to prove fraudulent intent in a general coin-related case, but this case is a typical anti-return structure that guarantees a high return of 20% and makes up for the profit of the person in front with the investment of the person behind it. It is an event that can show the presence of Hapdan as much as we have seen.”

Wondara reporter




Balance to see the world, Hankook Ilbo © Hankookilbo

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