The Terra/UST $60 Billion fiasco seems to be slowly dying down. However, South Korean prosecutors announced plans to open a new investigation into the company and its executives.
According to the Korean Herald, the Financial and Securities Crime Joint Investigation Team from the Seoul Southern District Prosecutors Office met with many crypto experts and financial regulators in order to examine Terra tokens.
Terra Tokens Could Be Securities
According to the report, Korean prosecutors intend to decide whether Terra’s digital assets should be classified under securities. This includes its native token, LUNA. Financial regulators have worked for years to identify which crypto assets can be classified as securities or non-securities.
Although some experts claim that cryptocurrencies can be issued as stocks, others argue that they should be considered securities.
TerraForm Labs founder Do Kwon and other executives will face criminal charges for violating the Capital Market Act if Terra tokens are found to be securities during the investigation.
Following the UST scandal earlier in May, the firm and its executives were charged with fraud and tax evasion. This resulted in the loss in excess of $60 billion in investor funds.
This latest investigation is part of South Korean prosecutors’ efforts to expand their investigation into Terraform Labs, its co-founders and the cataclysmic collapses of LUNA/UST.
Several individuals and entities connected to Terra have been investigated by the Korean authorities. In continuation of investigations, the prosecutors raided Daniel Shin’s house in July.
People familiar with the matter say that the new decision by the prosecutors would help policymakers to develop the legal framework for crypto regulation in the country.
The U.S. SEC expands its probe into Terra
According to the report, the United States Securities and Exchange Commission is expanding its investigation into Terraform Labs.
Mirror Protocol, the firm’s DeFi platform is under SEC surveillance for selling mirrored assets Netflix or Tesla stocks in UST.
The post South Korean Prosecutors Launch a New Investigation into Terraform Labs: Report appeared originally on CryptoPotato.
Marla Brooks – Financial Analysis
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