While the South Korean government intensifies its inquiry into Do Kwon and the Terra crash, a closer examination of legal issues reveals some surprising insights.
Do Kwon and Terraform Labs are facing legal action and tax evasion allegations have been made against them.
Do Kwon Under Legal Scrutiny
The government of the country also intends to establish a digital asset watchdog in the near future. The digital asset committee will keep an eye on the markets and develop a listing, transparency, and strong regulatory criteria. It will also interact with a team made up of the top five cryptocurrency exchanges in South Korea.
But the stakes for Do Kwon aren’t as high as those of others who have lost money in Terra investments. According to a CNBC study, former federal prosecutors and regulators. Randall Eliason believes he will face fines and penalties due to the situation. In the worst case, Kwon would have to serve a prison sentence.
Billion Of Penalty For Terra?
In the Do Kwon case, there might be fines based on the size of the loss, where estimation will be approximately $60 billion. The Terra founder could be hit with court orders and disgorgement.
Additionally, Binance CEO CZ asked his investigative team to verify the accusations leveled against Kwon by Terra insider FatMan. CZ has been a vocal opponent of algorithmic stablecoins and Kwon’s proposal to revive UST and LUNA tokens.
It’s also worth noting that Binance proceeded with caution while listing the new LUNA currency. The coin listing got approval in the exchange’s innovation zone, which is for high-risk tokens.
Amidst all the chaos, FatMan recently revealed that Kwon may create a new decentralized stablecoin on Terra 2.0 in the near future.
