07 Oct 2022 · 2 min read

S Korean Court Rejects Terra Exec Arrest Warrant Request, LUNC Prices Rise

Source: Jivimages/Adobe

Prosecutors in South Korea have been dealt a blow after a district court rejected their arrest warrant request for a Terraform Labs executive who they think headed the troubled firm’s business operations – with Terra Luna Classic (LUNC) prices rising high in the wake of the news.

Yonhap and Newsis reported that Judge Hong Jin-pyo, the head of the warrants issuance division at the Seoul Southern District Court, dismissed the prosecutors’ arrest warrant for an individual surnamed Yoo (first name not disclosed for legal reasons).

LUNC prices began to rise sharply in the (UTC) morning of October 7, making gains of 2.1% in the past 24 hours at the time of writing.

LUNC prices on October 7. (Source: CoinGecko)

Yoo was described as the head of the Terraform Labs business team, and prosecutors wanted to arrest him for alleged violations of the Capital Market Act, as well as fraud and breach of trust.

Prosecutors claimed that Yoo operated a bot-run program that manipulated coin prices by creating “fake” or misleading transactions designed to dupe traders into thinking market movements were taking place.

But Judge Hong claimed that there was “room for dispute” in the prosecution’s allegations and raised concerns that some of the charges were based on the assumption that Terra tokens are securities. South Korean law does not classify tokens as securities, the judge noted.

Hong added that Yoo had voluntarily returned to South Korea from Terraform’s Singapore headquarters at the request of investigators. Yoo also has family based in South Korea, so does not pose a significant flight risk, the court ruled.

Nevertheless, Yoo was described as a “key aide” to Do Kwon, the missing mastermind and co-founder of Terraform. The media outlets added that prosecutors may yet seek to return to the court to make a second request for Yoo’s arrest.

Terra Arrest Warrant Request Rejected, Do Kwon Hunt Continues

Meanwhile, the Ministry of Foreign Affairs has announced that it has been unable to serve Kwon with a passport return order notice – as it cannot establish where he is based. However, the ministry explained on October 5 that if Kwon failed to voluntarily turn in his passport to the ministry within 14 days, Kwon’s existing passport would be “automatically invalidated.”

Kwon has remained defiant on social media – and has claimed that he walks the streets with no fear of arrest, despite a “politicized” attempt to bring him before South Korean courts.

Kwon’s Terraform co-founder, Daniel Shin, is set to face questions from a National Assembly committee this month.