CEO and co-founder of Terraform Labs, Do Kwon, has filed for dismissal of charges put up against him by the Securities and Exchange Commission (SEC). In his motion, which started on April 21st, Kwon argued about the invalidity of SEC’s claims, referring to the agency’s position about MIR, UST, and LUNA, which it claims to be securities.
Kwon’s attorney argued that Terra’s tokens and projects were aimed at worldwide use and were not specifically targeted at the U.S. market and investors. With this defense, Kwon’s lawyer argued that the SEC violation charges against Kwon and Terraform Labs were outside of the agency’s jurisdiction.
Recently, the S.Korean district court dismissed a case where Hyun-Seong Shin, co-founder of Terraform Labs was being charged with security violation, thus accounting for the LUNA as a non-security under Korea’s Capital Markets Act. Therefore, Kwon’s request for dropping security violation charges against him was correct only with regard to LUNA.
Seoul Southern District Prosecutor’s office has already indicted 10 people involved in the Terra stablecoin ecosystem collapse. Signum was identified by the prosecutor as the Swiss bank account of Do Kwon, where he would transfer over 10,000 Bitcoin (BTC) from both the Terra platform and Luna Foundation Guard (LFG) to a cold wallet only to later convert it to fiat. The Financial and Securities Crime Joint Investigation Unit of the Seoul Southern District Prosecutor’s office stated that they are surveilling the Bitcoin owned by LFG, and noted that the transferred amount of around 100 million USD aligns with the SEC complaint.
The prosecutors reported that the 100 million was dispersed, and was not kept solely in the Signum account. Although some funds were found to be spent on the Kim & Chang law firm attorneys, to pay for the legal fees.
At last, while Know still awaits extradition from Montenegro, he is now facing additional criminal charges, which were put on him, shortly after he was arrested a month ago.