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Recently, the collapse of Terra has been increasingly discussed in the crypto world. Over the past few days, Terraform Labs and its founder, Do Kwon, have repeatedly faced accusations against them in connection with the recent collapse of the Terra ecosystem, which occurred as a result of falling prices for LUNA and UST.
At the same time, people are speculating about whether Do Kwon, who, according to some reports, owns more than 90% of Terraform Labs, can be held liable before the law for economic damage caused to Terra’s investors.
There have already been reports that he and his company are under close investigation by a group of elite South Korean government agents who are engaged in the fight against fraud. Now the topic of whether Do Kwon will go to prison or not is being actively discussed.
In addition, it is known that the collapse of Luna and UST is not the first failure of Kwon in the crypto space. A few years ago, he was behind another failed stablecoin called Basis Cash.
Interestingly, immediately after the collapse of Terra, Do Kwon proposed to create another project called Terra 2.0. The launch of the new blockchain, which was supposed to take place on May 27, was postponed to the next day, and during the airdrop there was an error, which is why many investors did not receive tokens.
Given the series of incriminating articles and a number of investigations into Do Kwon and his company, could he end up in jail?
CNBC reports that criminal charges in a market-related incident are difficult to prove in court because there is no indicator or technology to assess a person’s intentions. For example, if you are a dishonest CEO and make decisions that result in losses, your conduct is not criminal under U.S. law.
Assistant U.S. Attorney for the District of Columbia Randal Eliason explained the complexities of the indictment process:
It’s not like a murder in which witnesses are called in to testify about who pulled the trigger. Here we are trying to prove what was on someone’s mind.
Often this is a very painstaking process that involves studying a large number of documents, communicating with many people and with their lawyers, as well as setting up time for a large jury meeting and court appearances.
This can last a very long time, so no one should expect anything to happen overnight.
Nevertheless, the civil case can be successfully considered, and Do Kwon will be obliged to pay fines and compensation to the victims. Evidence in such a case will have a lower factual threshold than in a criminal case entailing imprisonment.
South Korean citizens who lost money during the fall of Terra have already adopted this option. In addition, terra’s CEO faced demands from South Korean tax authorities.
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