[Asia Economy Reporter Hwang Sumi] In the United States, there is a forecast that Kwon Do-hyung, CEO of Terraform Labs, who was sued by investors over the collapse of the cryptocurrency TerraUSD (UST) and Luna, will avoid imprisonment. However, it is analyzed that he is likely to face fines or civil lawsuits.
According to a recent report by the US economic media CNBC, former federal prosecutors and regulatory agency officials in the US stated in interviews that it seems difficult for CEO Kwon to be held criminally responsible.
This is because there is no clear evidence that CEO Kwon intentionally deceived investors. For prosecutors to hold Kwon criminally responsible, they must find direct evidence explaining his fraudulent plan, but since it is something that happened in someone's mind, it is difficult to prove.
They also added that in the US, business failures due to entrepreneurs' negligent judgment are generally not considered criminal acts.
However, CNBC reported that in the case of civil lawsuits, the burden of proof is much lower, so fines or additional sanctions related to fraud charges could be imposed on CEO Kwon. In particular, regulatory authorities such as the US Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) could impose fines or sanctions on him.
Sanctions from regulatory authorities may include fines, disgorgement of profits, or orders. Considering that the loss amount reaches tens of trillions of won, it is analyzed that this could significantly impact CEO Kwon's project progress.
Meanwhile, the actual damage amount from cryptocurrency fraud in the US last year was about 1 billion dollars (1.247 trillion won).
According to a consumer protection report issued on the 3rd (local time) by the US Federal Trade Commission (FTC), more than 46,000 people were victims of cryptocurrency fraud last year. The scale of damage has increased more than 60 times since 2018.
The most common type of fraud was false investment opportunities. This method attracts victims through manipulated investment websites and apps. The amount of cryptocurrency fraud damage reported to the FTC last year through such methods was 575 million dollars (about 720 billion won).
In this regard, the FTC advised to keep in mind that cryptocurrency investment returns are not guaranteed and to avoid business agreements that require cryptocurrency payments.
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