Legal troubles are piling up for the co-founder of the failed Terra cryptocurrency project, Do Kwon, as he the South Korean government reactivates the dormant Grim Reapers of Yeoui-do to investigate the fall of Terra.
The special investigation and prosecution team is made up of members from various financial regulators and is designed to go after securities fraud and unfair trading schemes.. At risk are co-founders Do Kwon and Shin Hyun-seong, along with key members of the Terra team. Yeoui-do is the financial center of Seoul.
Today: Korea’s “Grim Reapers of Yeouido” – Financial and Securities Crime Joint Investigation Team – are back after 2.5 years.
And its first target is $MOON / @terra_money— Jun (@zunahn) May 18, 2022
Today: Korea’s “Grim Reapers of Yeouido” -Securities and Financial Crimes Joint Investigation Team- are back after 2.5 years. And his first target is $LUNA / @terra_money
Korean media outlet SBS News confirmed on Wednesday that Terra’s case would be the first to be investigated by the resurrected Securities Crimes Joint Investigation Team. A team representative told SBS News that “the Terra case caused serious harm to average citizens, which led us to designate this as the first investigation.”
The reform of the feared investigation team may be a political move of the new conservative president Yoon Seok-yeol, reversing the previous liberal Moon Jae-in administration’s decision to dissolve it. Nevertheless, The seriousness of Terra’s situation is illustrated by the fact that this is the first case that investigators will be dealing with in two years..
The team earned the nickname “The Fates” due to the high-profile cases they handled.. One of the biggest cases the team handled was the $1.2 billion Lime Asset Management embezzlement scandal. The team disbanded before the investigation was completed, so the case will be reopened.
Before being disbanded, the team accumulated 346 arrests out of 965 cases processed from 2013 to 2020.
Terra is a layer 1 blockchain. Terra (LUNA) and stablecoin TerraUSD (UST) were each in the top ten cryptocurrencies by market capitalization until a May 8 sale of UST triggered a death spiral that has led to billions in losses. On May 8, Terra had a market cap of $24.8 billion, but it is now $959 million, according to CoinGecko.
Many in the community hold Kwon responsible for the collapse of the project. In South Korea, a group of Terra investors is also going to sue Kwon in civil court for damages and in criminal court for fraud.. They will also push for the court to seize Kwon’s assets.
$MOON and $UST Korean investors have filed both civil and criminal lawsuit against Do for committing fraud. They also filed to order a provisional seizure (freeze) of his assets from him.
They are represented by legal firm LKB & Partners.
— Doo | StableNode @Permissionless (@DooWanNam) May 18, 2022
The Korean investors of LUNA and UST have filed a civil and criminal lawsuit against Do for committing fraud. They also requested that the provisional seizure (freezing) of their assets be ordered. They are represented by the law firm LKB & Partners.
As Moonwha Ilbo (Culture Journal) reported on Wednesday, the legal team involved in the criminal case will prosecute based on the provisions of the Capital Markets Law, which is used to regulate the financial aspects of the cryptocurrency industry, but may be superseded by cryptocurrency-specific laws.
The legal team of LKB & Partners, the law firm handling the case, has a personal interest in the projectas partner Kim Hyeon-kwon told Moonwha Ilbo: “Some lawyers in this firm were investors in Terra.”
A representative for the firm did not immediately respond to a request for comment.
Kwon’s legal troubles extend beyond South Korea, as a Singapore resident filed a lawsuit against Kwon last week on behalf of at least 1,000 other residents who invested in the Terra ecosystem.
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