Terraform Labs Accuses South Korean Officials of Prosecutorial Overreach: WSJ

Singapore-based company Terraform Labs has stated that South Korean prosecutors exceeded the limits of their authority regarding the arrest warrant against the firm’s co-founder, Do Kwon.

Terraform Labs also said that the Luna token is not a security, arguing that public pressure could have caused the prosecutors to amplify the definition of securities.

South Korean Prosecutors Not Playing Fair

A spokesperson for Terraform Labs told the Wall Street Journal in a statement saying that South Korean prosecutors were “overreaching their authority.” According to the spokesperson:

“We believe that this case has become highly politicized and that the actions of the Korean prosecutors demonstrate unfairness and a failure to uphold basic rights guaranteed under Korean law.”

As previously reported by CryptoPotato earlier in September, a South Korean court issued an arrest warrant against Kwon and five others, claiming that they violated capital market rules. Shortly after, the Terraform Labs co-founder said he was not on the run but stated that he had no reason to make his location known to all and sundry, as the information was reserved for certain people.

The Terraform Labs spokesperson in the latest report also refused to divulge Kwon’s location, stating “ongoing physical security risks to him and his family” and attempts to break into the co-founder’s South Korea and Singapore residences as reasons for concealing his whereabouts.

Meanwhile, Singaporean authorities earlier stated that Kwon was not in the city-state. On September 26, South Korean prosecutors noted that Interpol issued a red notice for Kwon, who still maintains that he is not hiding from authorities.

Amid efforts to locate the Terraform Labs co-founder, there were allegations that Kwon moved 3,313 BTC from Luna Foundation Guard (LFG) wallets to KuCoin and OKX. He refuted the claims.

Luna is Not a Security

Terraform Labs has also argued that Luna is not legally classified as security, which meant that the token was not under South Korea’s capital markets law. According to the firm, this would also mean neither Do Kwon nor the company carried out any illegal operations. The spokesperson said:

“We believe, as do most in the industry, that Luna Classic is not, and has never been, a security, despite any changes in interpretation that Korean financial officials may have recently adopted.”