Even as the South Korean government escalate investigations over Do Kwon and the Terra crash, looking deeper into legal aspects reveal interesting facts. Do Kwon and the Terraform Labs are facing lawsuits and tax evasion charges have been filed against Do Kwon and Terraform Labs.
The country’s authorities have also planned to introduce a digital asset watchdog very soon. The digital asset committee will monitor markets and establish guidelines on listing, disclosures and investor protection. It will also consult with a body comprised by the top 5 South Korean crypto exchanges.
How Deep Is Kwon In Legal Trouble?
However, what’s at stake for Do Kwon is not as much as anticipated by those who lost in Terra investments. According to a CNBC report, former federal prosecutors and regulators feel the whole scenario could likely lead to fines and penalties against him. In a worst case scenario, Kwon could get some time behind bars, it is believed.
Randall Eliason, a former assistant U.S. attorney, said prosecution could involve reviewing piles of documents and talking to several people. “No one should expect anything to happen overnight,” he suggested in the report.
Billions Of Fines Possible For Terra Collapse
Fines could be levied in the Do Kwon lawsuit based on amount of the loss, which is around $60 billion. Injunctions and disgorgement could also be issued against the Terra founder.
Meanwhile, on Wednesday, Binance chief executive officer CZ asked his investigation team to look into allegations by Terra insider FatMan against Kwon. CZ had always opposed the idea behind algorithmic stablecoins and Kwon’s plan for revival of UST and LUNA tokens.
It should also be noted that Binance took a cautious approach in listing the new LUNA token. On Sunday, the Terra team made an announcement for Terra Luna 2.0 launch. The exchange listed the token under innovation zone, a category for high-risk tokens.
Amid all the turbulence, FatMan recently revealed that Kwon could launch a new decentralized stablecoin on Terra 2.0. FatMan said a verified insider told that Kwon is currently designing a new decentralized stablecoin.
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