The cryptocurrency market witnessed the unbelievable last week as TerraUST went straight to $0 after it got depegged 1:1 from the USD and LUNA crashed 100% falling to $0. The crash opened up a Pandora’s Box of accusations and financial investigations against its founder Do Kwon. Just yesterday, regulators in South Korea issued a warrant against Do Kwon and are now investigating Terra’s collapse. In addition, the authorities also slapped Do Kwon with $78 million for tax evasions. Questions now arise is can the Terra founder, Do Kwon ever go to prison for mishandling the crash? Let’s find out.
Crypto journalist David Z Morris wrote a provocative piece last week labeling Do Kwon as Elizabeth Holmes. For the uninitiated, Elizabeth Holmes is a biotechnology entrepreneur who founded the firm ‘Theranos’ and was convicted of criminal fraud. Morris believes the same fate should knock the Terra founder down and bring him to justice.
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Can Terra Founder Do Kwon Ever Go To Prison?
While the anger boiling against Do Kwon is justifiable, not much evidence is out in the open that he indulged in criminal activities. The law cannot hold him accountable for simply ‘mishandling the situation’ and being ‘reckless’ while doing business. Do Kwon’s way of handling the situation was bad but that in any way isn’t against the law.
Randall Eliason, a law professor and former prosecutor who specializes in white-collar crime, said that for Do Kwon to face prison, evidence should show that he broke the law. If not, then Do Kwon is not guilty of any crimes and is a free man.
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“When hedge funds and others lose a lot of money, it doesn’t mean there’s fraud. Prosecutors would need some evidence that it’s not a bad idea or spectacular failure,” Eliason said to Decrypt.
He also suggested that chances of finding evidence could be meager, as investigators don’t find trails of emails easily. “You don’t find emails like that very often. Instead, it’s often an accumulation of things, and lots of circumstantial evidence.”
He added that those waiting for sentences might not get their hopes up. “You’re not going to have a classic smoking gun,” he summed it up.
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