Crypto fugitive Kwon gets boost as Terra Aide avoids detention

moneycontrol.com:

Crypto fugitive Do Kwon received a boost after a court allowed an executive linked to his collapsed Terraform Labs ecosystem to avoid jail and indicated room for dispute over some of the allegations the person faces.

The court in Seoul said it didn’t see a need to detain the suspect and added there’s scope for legal debate over whether the individual breached the nation’s capital-markets law, charges that Kwon and four others also face.

Kwon created a pair of tokens, an algorithmic stablecoin TerraUSD that was meant to have a constant $1 value in a complex arrangement with a sister coin, Luna.

The project suffered a spectacular $60 billion wipeout in May, roiling the global crypto market and shocking regulators.

Kwon’s location became unclear after South Korea last month sought his arrest. He is the subject of an Interpol red notice but has denied wrongdoing.

One of the issues in the case is whether Luna was subject to securities law -- echoing a wider question officials globally are asking about the status of digital tokens.

The Seoul court said in the judgment Thursday that the charges in the case are very serious while adding there’s room for legal argument over whether Luna counted as an investment contract security under the Capital Markets Act.

Prosecutors in Seoul said the judgment probably was a boost for Kwon’s case.

‘Optical Setback’

The development “could be an optical setback for the prosecutors, but they may still be able to charge Kwon with various other types of offence outside the realm of market misconduct, so this won’t necessarily close off that many available avenues for them,” said Claire Wilson, a partner at compliance and legal consulting firm Holland & Marie in Singapore.

The person who avoided jail is