Although it seems that the $60 billion Terra/UST affair is finally coming to an end, South Korean prosecutors have announced plans to launch a fresh probe into Terraform Labs and its core team.
The Seoul Southern District Prosecutors Office recently met with a number of cryptocurrency experts and banking regulators to study Terra tokens, according to a recent report by the Korean Herald.
The report reveals that Korean prosecutors want to decide whether to classify Terra’s digital assets, including its native token, LUNA, as securities. Financial regulators have been attempting to categorize crypto assets as either securities or not for a very long time.
While some experts contend that cryptocurrencies are securities since they can be issued like stocks, others contend that due to their decentralized nature, they should be categorized as commodities.
Terraform Labs, its founder Do Kwon, and other executives will be prosecuted for violating the Capital Market Act if the investigation finds that Terra tokens are securities.
Major investigation on Terraform Labs
The most recent investigation is a part of attempts made by South Korean prosecutors to expand their inquiry into Terraform Labs and its co-founders in relation to the catastrophic failure of LUNA and UST.
Multiple entities and individuals with any connection to the Terra case have been investigated by Korean authorities. Moreover, as TheCoinRise reported, prosecutors conducted a raid on the residence of Terraform Labs co-founder Daniel Shin earlier in July as part of ongoing inquiries.
Following the UST fiasco earlier in May, which resulted in the loss of more than $60 billion in investor assets, the company and its executives are now being accused of fraud and tax evasion.
The United States is also expanding its investigations into Terraform Labs and its co-founders. Notably, as TheCoinRise reported, the United States and South Korea also decided in July to collaborate over Terra to exchange any relevant information.