According to experts, Do Kwon, the CEO of Terraform Labs is not likely to be charged in America with criminal offenses for the fall of stablecoin terrausd and cryptocurrency terra (LUNA), as a result. According to legal experts, civil charges would be more probable. This could include lawsuits from cryptocurrency investors.
Do Kwon is unlikely to face criminal charges
Do Kwon has been questioned about his actions after the recent crash of cryptocurrency terra and algorithmic stabilitycoin terrausd.
Randall Eliason was a law professor at George Washington University Law School and spent 12 years working as an assistant U.S. prosecutor for the District of Columbia. CNBC reported that Kwon would not face criminal prosecution.
Emphasizing that prosecutors have to prove criminal wrongdoing beyond a reasonable doubt, he was quoted as saying, “It’s not like a homicide where you bring in witnesses to testify to who pulled the trigger.”
According to the legal expert:
We’re trying to prove what was going on in someone’s mind. That’s often a very painstaking process.
He elaborated that the process “involves reviewing lots and lots of documents, and talking to many, many people and dealing with all their lawyers through that process and scheduling grand jury time and court appearances.”
Renato Mariotti, a former federal prosecutor and trial attorney, stressed that prosecutors have to prove the defendant’s state of mind beyond a reasonable doubt, stating that they “often rely on emails, texts, tweets and other statements.”
Eliason mentioned the case of Elizabeth Holmes, former CEO at Theranos. In this case, they told investors they were using their own machines to run blood samples while in actual fact they were using other companies’ machines to perform tests. Eliason offered this opinion:
These are all signs that someone is trying to deceive or defraud and not just making mistakes, misjudgments or any other form of misconduct.
The burden of proof in civil cases is lower than that for criminal cases. It typically relies on the preponderance evidence. According to the preponderance test, the burden is satisfied when the victim convinces the factfinder that it is more than half likely that the claim is true.
Eliason detailed:
Frequently, in these kinds of cases, the appropriate remedies end up being civil, regulatory, and administrative — and actually not criminal.
Crypto investors could be sued in civil cases. In South Korea, a class action lawsuit has already been filed against Kwon, his company Terraform Labs, and the company’s co-founder.
Kwon, a U.S. citizen is currently in serious trouble with the Securities and Exchange Commission (SEC). Kwon dodged some subpoenas this year, and filed an opposition motion against the regulator.
“There are a lot of other potential agencies or governments who could take a look at this conduct, in addition to the private individuals who were harmed,” the legal expert noted, adding:
There is going to be issues with jurisdiction … since he’s not in the U.S. South Korean authorities might have something to say about possible sanctions.
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