Tera Ignores Financial Supervisory Service Warning of "Business Prohibition"... Shin Hyun-sung Claims "Proceeding Legally"

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Byung-don] Regarding the ‘Terra·Luna’ incident, suspicions have been raised that the issuer, Terraform Labs, ignored the financial authorities' opinion that cryptocurrency could not be used for payment business in the past and proceeded with the business.

According to the Financial Supervisory Service on the 28th, it was confirmed that in 2018, Terraform Labs was pre-warned that cryptocurrency is not legally a payment method and therefore cannot be subject to payment business registration.

When Terraform Labs inquired whether to register the cryptocurrency payment business as an ‘electronic financial business’ or a ‘payment business,’ the Financial Supervisory Service reportedly responded that virtual assets cannot be registered as a payment business in any form.

The Seoul Southern District Prosecutors' Office Financial and Securities Crime Joint Investigation Team (Chief Dan Sung-han), which is investigating the Terra·Luna incident, is also verifying such circumstances with the financial authorities and investigating fraud charges against Terraform Labs CEO Kwon Do-hyung and co-founder Shin Hyun-sung.

CEO Kwon and Mr. Shin are accused of deceiving investors through the media by making them believe that Terra could be used like cash on e-commerce sites within 2018, despite repeatedly confirming the financial authorities' policy from 2018 to 2019.

In response, Mr. Shin's side stated, "At that time, the financial authorities never expressed a position that payment business using blockchain or virtual assets was impossible or illegal," and added, "At that time, Chai Corporation proceeded with the business legally based on consultations from a major reputable domestic law firm that reviewed various laws and confirmed the financial authorities' stance."

This content was produced with the assistance of AI translation services.