Some parties view cryptocurrencies as securities as it is possible to issue them like stocks, but others classify them as commodities. If Korean prosecutors find the Terra assets are securities, TerraForm Labs and Do Kwon will face new legal problems.

The collapse of the Terra (LUNA) ecosystem seems to have faded from the spotlight over the last month. However, South Korean prosecutors plan to reopen the case while investigating whether the LUNA assets are securities.

The Financial and Securities Crime Joint Investigation Team of the Seoul Southern District Prosecutors Office reportedly contacted cryptocurrency experts and financial authorities. South Korean prosecutors seek to determine whether LUNA and other digital assets on Terra qualify as securities.

Stocks and debt securities are among the marketable financial assets that specialists describe as securities. There has been a lengthy debate within the cryptocurrency industry about whether virtual assets are stocks.

Financial regulators have reiterated the question of whether crypto assets fall within the category of securities. For example, cryptocurrency exchange network Ripple has faced similar legal troubles for years.

Since it is possible to issue cryptocurrencies like stocks, some parties view them as securities. However, others classify them as commodities due to their decentralized nature.

TerraForm Labs Faces Legal Battles in Korea and the United States

If Korean prosecutors find that the Terra assets are securities, TerraForm Labs and its founder Do Kwon will face new problems. The authorities will accuse the company and its executives of violating the Capital Market Act.

The decision by the officials will also be crucial for lawmakers to define a regulatory framework for the South Korean cryptocurrency industry. TerraForm Labs already faces legal problems due to the collapse of the Terra network in May, when investors lost USD 60 billion in assets.

After that incident, many people started to accuse the company of fraud and tax evasion. In July, prosecutors searched the home of Daniel Shin, the co-founder of TerraForm. Other major cryptocurrency companies related to Terra have also undergone extensive investigation.

Nobody knows exactly where the CEO of Terra is, but prosecutors ordered a notification upon his arrival in Korea. That will allow relevant authorities to know when Do Kwon enters the country.

The arrest warrant for Do Kwon includes co-founder Nicholas Platias and employee Han Mo, among the other three representatives of TerraForm.

That news on the investigation into TerraForm Labs by Korean prosecutors comes as the US SEC deepens its probe into it. The federal government agency is scrutinizing the Mirror protocol, the DeFi platform of the company.

TerraForm Labs has not registered Mirror Protocol in the United States, which led to the investigation by the SEC. The agency investigates whether the company has violated consumer protection laws by trading troubled currencies in the country.

Meanwhile, Terra (LUNA) is trading at around USD 2.88 and has accumulated a 34.9% loss over the last 24 hours. While its daily trading volume is above USD 1.35 billion, its market capitalization is about USD 472.03 million, according to CoinGecko.

By Alexander Salazar

Prosecutors hope Interpol will help them capture Do Kwon and other TerraForm Labs representatives. Various agencies, which have targeted Terra after the collapse of UST, suspect that LUNA was part of a pyramid scheme.

A South Korean court recently issued an arrest warrant against Do Kwon, the founder of TerraForm Labs. It is relevant to remember that this company is the issuer of the TerraUSD (UST) stablecoin.

The warrant for the arrest of Do Kwon includes Nicholas Platias, a co-founder of TerraForm Labs, and Han Mo, an employee of the company. The regulatory authorities allegedly charge the businessman and his team with violating the Capital Market Act.

Local media have reported that Do Kwon might be in Singapore, highlighting that the arrest warrant is valid for one year. South Korean prosecutors hope Interpol will help capture the cryptocurrency developer and other representatives of TerraForm Labs.

The Terra Ecosystem Continues to Face Problems after Its Collapse

The stablecoin UST of the Terraform Labs project collapsed in early May, losing its parity with the US dollar. Its price dropped, dragging the native token of the platform with it.

TerraUSD and Terra (LUNA) were among the top 10 crypto assets by market capitalization. Amid the collapse of the Terra ecosystem, which caused many cryptocurrencies to die, investors lost about USD 40 billion.

The developers behind the two cryptocurrencies released a new version of LUNA ad distributed new coins among the affected users. Many users reported that the amount they received was insufficient to cover their losses, proving the failure of the airdrop.

The situation worsened when the value of the LUNA 2.0 token started to decline immediately after its launch. Seeking to remedy that, the developers launched other token airdrops, scheduled to last until October 4^th.

Despite His Previous Failing Projects, Do Kwon Denies the Accusations

In late June, the South Korean authorities told the developers of Terra to stay in the country. In August, the Ministry of Justice approved a request from Seoul prosecutors to restrict the movements of Do Kwon when he is in Korea.

Amid regulatory pressure, the developer hired lawyers, denying any accusations of fraud against him despite his previous failing projects.

South Korea Views the Terra (LUNA) Case as a State Problem

Terraform Labs is a South Korea-based company that has caused thousands of people to lose money in the country since its beginning. Due to the high number of victims nationwide, the government views this issue as a state problem, taking measures against it.

South Korean prosecutors have sought evidence to address the Terra (LUNA) case for some time. In July, they searched 15 different locations as part of the active investigation. On the list were also seven cryptocurrency exchanges, the home of Daniel Shin and the Chai Corporation.

The collapse of UST, which caused many South Koreans to lose capital, has led various agencies to target Do Kwon and the team behind Terra. They suspect that LUNA was part of a pyramid scheme, which has led hackers from the group Anonymous to help bring them to justice.

By Alexander Salazar

The new plan would see the company become a custodian of crypto assets with a fee structure for different transactions.

Under the new plan, codenamed Kelvin, the lender would move to storing customers’ cryptocurrencies in a special wallet and charging different fees for various transactions.

To employee skepticism, Mashinsky rhetorically asked employees if two companies that went bankrupt, PepsiCo and Delta, were preventing people from buying Pepsi or flying on Delta airlines. “Does it make Pepsi taste less good?” Mashinsky joked. “You don’t fly Delta because they went bankrupt?” he added.

Celsius revival

Celsius filed for bankruptcy in July 2022. This was about a month after pausing all withdrawals as the cryptocurrency market downturn affected the company’s business model which offered astonishing 19% returns on cryptocurrency investments.

While defending himself as helping the average Joe escape the clutches of Wall Street banks, investor documents revealed that the cryptocurrency lender was much more at risk than a bank. It made large loans with little collateral, making it difficult to meet massive customer withdrawals. Now he owes clients $4.7 billion.

New Plan Will Work, Says Blonstein

Any decision to recast Celsius as a custodian rather than a lender would have to be approved by the New York bankruptcy judge overseeing the matter. So far, the company has received permission to use its crypto mining facilities to generate revenue to help it meet customer withdrawal demands.

It has hired an Unsecured Creditors Committee through a legal representative to resume business. The committee is keen for Celsius to continue operations, but expressed doubt the company could go ahead with Mashinsky at the helm. The committee is also skeptical of the Kelvin plan.

But Oren Blonstein, Celsius Chief Innovation Officer and Chief Compliance Officer, insists that the Kelvin plan could work. “If the core of our business is custody, and our clients choose to do things like gamble somewhere or trade one asset for another, or take a loan against an asset as collateral, we should have the ability to charge a fee.” he said at the meeting.

This plan would depart from the original spirit of the zero-fee company. Blonstein also added that the company had an unusual plan to pay customers without disclosing details. “If we are successful, it will be a success story the likes of which has never been seen before,” he concluded.

Celsius Plan Draws Ridicule from Crypto Twitter

The new plan has drawn criticism on crypto Twitter, with journalist Jacob Silverman posing the rhetorical question: “Why would anyone trust a reanimated Celsius as a custodian? I think Mashinsky’s main concern is probably staying out of jail.” Silverman is the co-author of a book with former OC actor Ben McKenzie on crypto and fraud.

Another Twitter user, @ross_stalker, questioned the incentive to deposit funds in Celsius instead of depositing the funds in a regular bank. “Why would you pay a fee to hold crypto in a new type of secure crypto wallet described by executives at Celsius when you could store money in a bank without being charged?”

Celsius is awaiting the outcome of a bankruptcy hearing scheduled for October 6, 2022, where it will be decided whether customers will be able to withdraw their crypto from the company’s “escrow program” and “hold accounts.”

By Audy Castaneda

The Cryptocapital panel argued that Ethereum will not maintain its bullish streak for long.

In the last gathering of Capital Radio’s Cryptocapital, hosted by Sergio Fernández, analysts agreed that the Ethereum Fusion “lacks” the necessary strength to boost the price of Bitcoin, but on the contrary, the bear market and the ups and downs of BTC will make move back in price to ETH after The Merge.

Last week, the price of Bitcoin fluctuated between 19,500 and 22,500 dollars; however, after revealing that inflation in the United States stood at 8.3% in August, the price of BTC went from 22,645 to 20,300 dollars, a decline of more than 8.70% in less than 24 hours. ETH’s meltdown rally was not sustained as the cryptocurrency dropped from $1,743 to $1,565, a more than 5.60% crash on September 13.

The last Cryptocapital panel was made up of:

Arnau4Bet (@arnau4bet).

The Prince (@ElPrincipeAM).

Sergio (@RiderOnCrypto).

FranX73 (@FranEQUIS73).

The Program Host’s Starting Point

The host of the Capital Radio program, Sergio Fernández (@Sergio_fdez_7),

“I remember the Cardano update last year, there was an incredible hype and I remember the news came out and down, since then. If that happens with Ethereum, if it goes wrong or is not implemented well, the opposite could happen, it could be negative. The question remains whether the Fusion will work or not. However, the CEO of Pantera Capital mentioned that we are beginning to see the light, perhaps there are beginning to be signs of leaving the bear market.”

The hype for the Merger is such that the number of Ethereum wallets with more than 1,000 ETH increased to a maximum of 15 months days before The Merge. BeInCrypto reported that the last similar increase in the number of wallets occurred in May 2021. The increase in wallets corresponds with an increase in unique addresses, reported on September 4, 2022.

Experts agree that the Rest of the Year will be Bearish for BTC

Cryptocapital’s panel of experts emphasized that the current bear market and the next Bull run will be different from the past, it is not comparable, and that on this occasion, the main cryptocurrency has not had a drop of 85% as in previous years and agreed that the bear market will continue for the rest of the year, with brief rallies.

“I see it as difficult for the price to reach the $28,000 or $29,000 zone and cross it, but I see a lot of chances of going to these levels, which is a short zone, and to release and return to liquidity again. It is not possible to know if a bottom is or not until we see that the price crosses that zone of 28,000 dollars, we will enter an immediate bull run. My hypothesis is that the price from the last low of $17,000, hits the $28,000 zone, that’s where they’ll catch people and maybe go back to the $17,000 zone or the $14,000 zone.”

Bitcoin continues to generate opinions for and against, such as the one issued by the Nobel Prize in Economics, Eugene Fama, who argued that Bitcoin (BTC) would have value “if used as money”; however, it noted that its volatile nature diminishes its viability as a traded asset.

The also considered “father of modern finance”, considered that “the market has not realized that Bitcoin has no value” and that “they will probably carry out transactions with it and then quickly abandon it”, arguing their doubts about the biggest cryptocurrency of the world.

By Audy Castaneda