Prosecutors Request Ministry of Foreign Affairs to Invalidate Passport of Terraform Labs CEO Kwon Do-hyung
Among the 6 Individuals Subject to Arrest Warrants, 5 Are Korean
[Asia Economy Reporter Yoo Byung-don] The prosecution investigating the Luna and TerraUSD (UST) crash incident has requested the invalidation of passports for Terraform Labs CEO Kwon Do-hyung and others, who are known to be residing overseas.
The Joint Investigation Team for Financial and Securities Crimes of the Seoul Southern District Prosecutors' Office (Chief Dan Sung-han) and the Financial Investigation Division 2 (Chief Prosecutor Chae Hee-man) announced on the 15th that they recently requested the Ministry of Foreign Affairs to invalidate the passports of CEO Kwon and five related individuals, including Han Mo, CEO of Terraform Labs affiliate Chai Corporation.
According to the Passport Act, individuals who have arrest warrants issued against them and are abroad may be refused issuance or reissuance of passports, or be ordered to return their passports. The Ministry of Foreign Affairs plans to send passport issuance restrictions and passport return orders to CEO Kwon and others, and if passports are not returned within the deadline, they may be invalidated.
Previously, the prosecution also obtained arrest warrants for them as well as for Nicholas Platias, a founding member of Terraform Labs.
Meanwhile, the prosecution considers Luna and Terra to fall under "investment contract securities" under the Capital Markets Act and has applied charges of violating the Capital Markets Act to them, obtaining arrest warrants. Virtual assets have not been subject to the Capital Markets Act as their securities nature had not been recognized until now.
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Investors who suffered losses due to the crash of Luna and Terra filed a complaint with the Seoul Southern District Prosecutors' Office in May, accusing CEO Kwon of fraud and other charges, claiming that he failed to properly disclose defects of the coins to investors and that it constitutes a multi-level financial fraud (Ponzi scheme).
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