Authorities in South Korea are striving to build a compelling case against Do Kwon, the founder of the defunct Terra (LUNA) ecosystem.
According to Bloomberg, there is a debate about whether tokens related to the Terra ecosystem should be regulated like other traditional asset classes like as equities and bonds due to a lack of defined crypto regulatory laws.
The prosecution’s case was recently struck a blow when the court denied the prosecutor’s office’s request to detain a person connected to the Terraform Labs ecosystem.
According to the judge, the question of whether the individual violated the South Korean Capital Markets Act, as charged by the prosecutors, remains open.
It should be noted that Kwon is accused of breaking the country’s Capital Markets Act, for which he now has an arrest order. Since then, he has denied any misconduct.
Interestingly, the prosecution appears to have acknowledged the problems in the cases by declaring that it is making “best efforts” to prove the matter. The authorities, however, believe that the lack of clear regulations does not mean that the investigations are over.
At the same time, it’s important to mention that Kwon is facing further counts that the prosecution has yet to reveal. Around 280,000 people who suffered losses as a result of the catastrophe also demanded compensation.
This comes after the victims’ attorney filed a complaint accusing Kwon of fraud and illegal fundraising.
Notably, concerns regarding the South Korean prosecution of the Terra case are part of a worldwide debate, with several countries questioning whether cryptocurrency should be handled similarly to traditional stocks or commodities.