South Korean prosecutors are looking to define the troubled Terra (LUNA) as security. A report from the “Korea Herald” pointed out that defining Terra (LUNA) as security could put the coin developers and those complicit under scrutiny for not only fraud but also for violations of the Capital Markets Act.
Recently, the Seoul Southern District Prosecutors Office’s Financial and Securities Crime Joint Investigation Team met with crypto experts and financial authorities to review if LUNA can be categorized as a security. The move came after Terra (LUNA) developer Terraform Labs’ was held responsible for making over $83 billion of investors’ funds disappear.
LUNA is the native staking token of Terra protocol, which became highly controversial since its Terra (LUNA) and related algorithmic stablecoin collapse. However, LUNA’s price shot up by 200%, earlier this week.
U.S. SEC Expands Scope Of Investigations Into Terraform Labs
Korean prosecutors are also targeting Terraform Labs and its co-founders, Do Kwon and Daniel Shin, after terra and its sister coin luna’s $40 billion crash in May caused some 280,000 local investors holding 70 billion of the troubled tokens to lose large sums of their money in the first wave of the shock.
It has come to light that prosecutors have raided Shin’s home, while Kwon’s whereabouts are currently unknown. Prosecutors have placed “a notification upon arrival” on Kwon, in which they will be alerted upon his entry into Korea.
Parallelly, the U.S. Securities and Exchange Commission has decided to expand its scope of investigation into luna and terra USD developer ‘Terraform Labs.’
In fact the latest investigation is around the Mirror Protocol – a decentralized finance platform designed by Terraform Labs to track Netflix and Tesla stock prices and sell their “mirrored assets” in terra USD. Terraform Labs’ Mirror Protocol platform was not registered in the US and the SEC is currently investigating whether the company violated consumer protection laws in marketing luna in the country.
On the Flipside
- Recently, Terra (LUNA) showed signs of recovery by shooting up by 200% in a bear market.
Why You Should Care
The South Korean prosecutors’ decision regarding luna carries more weight since it would have an impact on policymakers’ work in laying out the legal framework around crypto. South Korea is struggling to find its feet when it comes to laying out clear policies and regulations around crypto.
Know why Terra Luna has been in news lately: