Terraform Labs said South Korea’s case against its co-founder Do Kwon has become political, claiming prosecutors expanded the definition of a security in response to public pressure.
South Korean prosecutors issued an arrest warrant for Kwon on Sept. 14 for violations of the country’s capital markets laws, but Terraform Labs laid out a defence arguing Terra, now known with its new token, Luna Classic, isn’t legally a security, meaning it isn’t covered by capital markets laws.
The spokesman alleged prosecutors of expanding the definition of a security due to intense public pressure from the collapse of Terra and its connected algorithmic stablecoin TerraUSD (UST), now known as TerraUSD Classic (USTC):
The argument by Terraform Labs’ stems from the unclear regulatory status of cryptocurrencies and the companies who create and issue them. Currently, capital market and electronic securities’ systems in the country don’t include a legal definition of non-standardized securities issued through a blockchain.
Kwon’s whereabouts remain unknown and Terraform Labs did not comment on his location citing physical security risks, but Kwon says he’s not making an effort to hide even after a notice was sent to global authorities by Interpol.
