Prosecutors investigating allegations of fraud by the developer in relation to the crash of the Korean cryptocurrencies Luna (LUNC) and TerraUSD (UST) have begun to estimate the exact amount of damage.
In order to estimate the amount of damage, the prosecution may need to secure relevant data from the developer Terraform Labs, so there is a possibility of a forced investigation.
It is known that the Seoul Southern District Prosecutor's Office's Joint Investigation Team on Financial and Securities Crimes is reviewing legal principles to see if it can be considered fraudulent damage in the case of purchasing Luna Coins from an exchange and losing money due to the collapse.
An official from the investigative authorities said, "Most of those who bought Luna and suffered damage were those who bought it on the exchange as if they were buying or selling stocks."
This is a concern that starts from the fact that the criminal law stipulates that fraud is established when 'a person deceives a person to receive a grant of property or to acquire property benefits'.
For example, in the case of the Merge Point case, where there was a controversy over the 'Ponzi scam' (multi-level financial fraud), the prosecution reported that when consumers bought points, the amount went to Merge Plus, the point issuer, and charged with fraud. The trial is in progress.
However, if you buy Luna Coins on a cryptocurrency exchange, the money you buy Luna goes back to the seller who released the coins to the exchange, not to Terraform Labs or CEO Kwon Do-hyeong.
Even if Terraform Labs' failure to properly notify the algorithmic stablecoin's flaws is considered fraudulent, it is not easy to establish that CEO Kwon and others have 'acquired property benefits', so it is not easy to make a connection.
Lawyer Kim Jeong-cheol (Woori Law Firm), who represented victims of numerous financial frauds such as Lime Fund, said, “It is difficult to believe that the damage in the coin transaction process is actually fraud.” “In the securities market, market price manipulation and insider trading These are things that have been agreed upon, but this kind of problem occurs because the securities properties of coins are denied.”
In this regard, it is reported that the prosecution is first in the process of identifying only those who purchased the coin at the time of initial issuance, rather than being circulated in the market, as being 'damaged by fraud'.
It is impossible to understand this from the data obtained so far, so the merger means is pursuing a plan to receive data containing the first coin issuance and transaction history from Terraform Labs.
Regarding the possibility of a forced investigation if the company does not comply with the request for data submission, a prosecution official said that it was "under consideration".
However, it is known that the target of the search and seizure is virtually unclear as the Korean branch of Terraform Labs was dissolved and the office was withdrawn.
Measures to secure new recruits include invalidating passports and extradition of criminals.