Key Points:
- Bithumb, Coinone, and Gopax were the South Korean crypto exchanges where the cross trade of Luna and Terra currencies occurred, which precipitated the collapse.
- The prosecution acknowledged that the cross trading occurred until the end of February 2022.
- Only coins designated as securities may be penalised for cross trading as an act of market manipulation.
According to the Daily Economic News, the 800 billion won (about $600 million) cross-trading relating to the “Luna and Terra” that precipitated the meltdown was taken out on the South Korean crypto exchanges Bithumb, Coinone, and Gopax.
Among them, Bithumb’s cross-trading volume hit 300 billion won, Coinone’s cross-trading volume reached 400 billion won, and Gopax’s cross-trading volume reached 100 billion won. The process of offsetting purchase and sell orders for the same item without registering an exchange transaction is known as cross-trading.
“The defendants, along with Terraform Labs CEO Kwon Do-hyung, used the ‘bot’ program to cause a total of 412,916,892,603 won in ‘Coin One,’ 106,866,333,386 won in Gopax, and 298,711,061,592 won in Bithumb. (Shin Hyun-Seong, former Terraform Labs 8 people including the co-representative)”
The prosecution stated that the cross-trading concluded at the end of February 2022. At the time, the market and circles made numerous legislative demands for virtual assets, and the majority of virtual asset laws and associated legal modifications were presented, but the emphasis was not scholarly on cross-trading.
According to the Capital Markets Act, only coins designated as securities may be penalized as an act of market manipulation.
In answer to a query from governing party MPs, Attorney General Han Dong-hoon addressed this during a plenary hearing of the National Assembly Law and Judiciary Committee on the 16th:
“Isn’t there a hole in the detection and punishment of unfair trading practices in virtual assets?”
On April 25, the Seoul Southern District Prosecutor’s Office charged former co-CEO Shin and others as Kwon’s collaborators, citing Luna’s securities character.
According to the article, punishing the 800 billion won Luna trade would be difficult unless the court recognized Luna as a security. Cross-trading only tokens ostensibly representing securities is punishable as market manipulation under the Capital Markets Act.
During the prosecution’s previous inquiry, the court did not accept the prosecution’s contention that “Luna is a security.” This is claimed to have resulted in the two arrest warrants for former CEO Shin and others being dismissed.
In related news, when a Montenegrin court recently authorized the decision to release Do Kwon on bond, local prosecutors contested the judgment.
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Harold
Coincu News
