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SEC Filing ‘May Help South Korean’s Prosecutors’ Do Kwon Case’ – Report

Tim Alper
Last updated: | 2 min read
A flag of the United States Securities and Exchange Commission next to a flag of the United States of America.
Source: GoodIdeas/Adobe

The US Securities and Exchange Commission (SEC)’s legal filing against Terraform Labs and its CEO Do Kwon “could help South Korean prosecutors’ case against Kwon,” a report has claimed.

Per the Hankook Ilbo, a major South Korean newspaper, the SEC’s status as a “quasi-judicial body” will help South Korean prosecutors’ cause. Previously, legal experts have claimed that prosecutors might struggle to convict Kwon of securities violations. This is due to the fact that South Korean law does not classify cryptoassets as securities.

South Korean prosecutors’ case against Kwon could hinge on whether they can convince a domestic court that Terra ecosystem coins are in fact securities. If they can, they may be able to prove that Kwon sold unregistered coins – knowing that they were actually securities.

A prosecution spokesperson stated:

“The SEC’s filing is a positive development. Since it is South Korean courts that determine the nature of virtual assets in Korea, we will focus on proving that [Terra coins are] securities while observing trends in US law.”

Earlier, the prosecution called the charges “meaningful.”

Kwon’s whereabouts are currently unknown. Prosecutors believe he is residing in Serbia. His passport has been canceled and an Interpol red notice has been issued, calling for his arrest.

How Might SEC Filing ‘Help South Korean’s Prosecutors’ Case’ Versus Do Kwon?

The media outlet claimed that the SEC had “virtually recognized the ‘securities’ nature” of Terra coins in the terms of its charges against Kwon and Terraform.

Should a US court uphold the SEC’s verdict, the media outlet noted this would “likely affect the position of the [South Korean] judiciary.”

While much will hinge on the verdict of the American courts, the media outlet quoted legal experts as stating that the filing was “encouraging news for South Korean prosecutors” – and could provide a “precedent” for domestic courts.

Such a lack of legal precedent has already hampered the prosecution’s case. The Seoul Southern District Prosecutor’s Office’s Financial Securities Crime Joint Investigation Team last year failed to convince a court to issue an arrest warrant for Daniel Shin, the Terraform Labs co-founder.

Kwon celebrated this news on Twitter at the time.

However, Kwon has refrained from posting since December 10 – around the time when prosecution officials began claiming they had discovered his country of residence.