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Media CoverageWith the SEC-Ripple lawsuit nearing its conclusion, what is the outlook for the cryptocurrency market?
Host: Anchor Choo Hye-jung Guest: Attorney Jin Hyun-su, managing partner at Decent Law Firm Q. The SEC-Ripple lawsuit outcome is imminent... What is the outlook for the cryptocurrency market? Ripple Labs developed a remittance service using blockchain technology The SEC sued Ripple, claiming "XRP is an unregistered security" "Ripple Labs violated securities laws by selling XRP to individual investors" Q. Why is the outcome of the Ripple Labs lawsuit important? The Ripple Labs lawsuit could shake the entire crypto market, not just XRP "The result of the Ripple lawsuit could set a global standard for crypto regulation" Q. What is the current status of the Ripple lawsuit? The lawsuit between decentralized Ripple and the SEC is intense The U.S. SEC has urged an immediate ruling on whether Ripple’s XRP sales violated securities laws "Currently, the case is at the legal review stage concerning whether Ripple violated securities laws" "A conclusion could come as early as this year" Q. What are the key issues in the Ripple-SEC lawsuit? Types of securities: • Debt securities • Equity securities • Profit-sharing securities • Investment contract securities • Derivative securities • Depository securities, etc. Investment contract securities (Article 4, Clause 6 of the Capital Markets Act): A contractual right indicating that a specific investor has invested money or other assets in a joint venture between the investor and others, and the profits and losses from the joint venture are attributed to the investor The U.S. Supreme Court's "investment contract" test: ① There must be an investment of money or other assets ② The investment must be in a common enterprise ③ There must be an expectation of profit from the investment ④ The profits must primarily come from the efforts of a third party Q. Is a cryptocurrency a security? Whether a coin qualifies as a security is judged on a case-by-case basis SEC Chair Gary Gensler has stated that "Bitcoin is not a security" "Coins are sold after contracts are drawn up and the project's profits or progress are announced" Q. Is Ripple’s XRP a security? The SEC claims Ripple violated securities laws with XRP Ripple argues that "XRP does not meet the criteria of the Howey Test" Q. What about the security status of Ethereum and Dogecoin? "Ethereum is sufficiently decentralized, so it cannot be considered a security" "Dogecoin is more of an experiment and fun meme coin, so it’s unlikely to be classified as a security" Q. What are the predicted scenarios for the outcome of the Ripple-SEC lawsuit? "There is a high possibility that XRP sales will be interpreted as violating securities laws" "Ripple emphasizes the ambiguity surrounding the concept of investment contract securities" "If XRP is classified as a security, Ripple could face fines or other economic sanctions"
2023-04-10 NBN NEWS -
Media Coverage
Warning issued for wash trading in plummeting cryptocurrencies.
Legal disputes surrounding cryptocurrency investments have increased during the COVID-19 pandemic. While some cryptocurrencies are traded without issues, there has been a rise in "coin crimes," where fraudulent cryptocurrencies, often referred to as "scam coins," are created to lure investors. These coins, which lack clear substance and economic value, are artificially inflated through wash trading and then sold off for illicit profits. As a result, investors need to exercise caution. (omitted) Hyeonsu “Elliot” Jin, an attorney at Decent Law Office specializing in cryptocurrency fraud, stated, “Many cryptocurrencies claim to be listed on famous foreign exchanges, but among them, there are many fraudulent coins. In particular, many elderly investors often transfer money to companies to purchase coins on their behalf. It's advisable to verify the identity of the other party and secure documents such as a business registration certificate and corporate registry before investing." He also added, “Smaller exchanges have a higher risk of fraud, either by issuing their own coins or colluding with coin companies. Therefore, it is safer to invest directly through larger exchanges or those holding a virtual asset business license. If an investment involves complex terms like lock-up (a method that restricts trading for a certain period after listing) or staking (fixing a certain amount of held cryptocurrency as a stake), it should raise suspicion.”
2023-04-09 biz.chosun -
Media Coverage
From cryptocurrency genius to a fugitive accused of a multi-billion dollar fraud, What is Do-hyung Kwon's final fate?
Host: Choo Hye-jung Guest: Pureun “Ian” Hong, managing partner at Decent Law Firm Q. Who is Do-hyung Kwon, the key figure in the Terra-Luna incident? CEO of Terraform Labs, Do-hyung Kwon's background: ‣ Graduated from Daewon Foreign Language High School ‣ Graduated from Stanford University with a degree in Computer Science ‣ Worked as an intern at Apple and Microsoft ‣ Founded a fintech startup Key figure in the Terra-Luna collapse CEO Do-hyung Kwon arrested after one year on the run The U.S. SEC charged him with securities fraud under the Securities Exchange Act Q. What is the Luna collapse, considered one of the largest crypto crashes? Luna, an algorithmic stablecoin Q. What is a stablecoin? A stablecoin is pegged to the value of the U.S. dollar Types of stablecoins: ① Fiat-backed ② Crypto-backed ③ Algorithm-based Q. What caused the Luna collapse? The Terra (UST) algorithmic stablecoin $51 billion evaporated in just 72 hours Q. Why did Luna and Terra crash? The promise that "Terra's price will always be $1" was broken The 1:1 peg between 1 Terra and $1 collapsed The loss of dollar-pegged stability impacted the entire crypto market Anchor Protocol allowed for DeFi with 19% annual interest on deposits Q. Was the Luna-Terra crash caused by a loss of investor trust? Terra conducted 'pre-mining' worth ₩1.5 trillion, which was not mentioned in the white paper Although not disclosed in the white paper, some institutional investors "knew about it" Terra claimed, "We explained it multiple times in chat rooms... no issues with transparency" Luna-Terra crashed, losing 99.3% of its value from its all-time high (a 150-fold drop) Q. What is the current status of Luna-Terra? Luna and Terra have lost their value, resulting in global investor losses The first case investigated by the Financial and Securities Crimes Joint Investigation Unit is the 'Luna-Terra' case Q. Is Luna-Terra a Ponzi scheme? Ponzi scheme: Using new investors' funds to pay returns to earlier investors Remaining funds are used to attract more new investors, making it a fraud Q. Was the structure of Luna-Terra a Ponzi scheme? High 19% interest paid through Anchor Protocol → suspected Ponzi scheme "No legitimate profit structure was in place" Q. Were issues with Luna-Terra raised at the time? Terra's pre-mining of ₩1.5 trillion, not mentioned in the white paper Although not disclosed in the white paper, some institutional investors "knew about it" Terra claimed, "We explained it multiple times in chat rooms... no problem" Q. Has there been an increase in cryptocurrency-related crimes? How to identify fraudulent coins? "It’s not easy to uncover crypto fraud" "Checking the coin’s white paper, operators, technical capabilities, and future profitability is essential" Q. What are the characteristics of crypto fraud victims? "Most crypto fraud victims are elderly" "They are often deceived by brokers and invest large sums, resulting in losses" Q. What are the legal standards for punishment in cases of crypto fraud in Korea? It falls under 'fraud' under the criminal law and violation of the 'Act on the Regulation of Conducting Fund-Raising Business without Permission' Korea has no precedent of punishing capital market law violations related to cryptocurrencies The first case involving cryptocurrency is being closely watched by the Financial and Securities Crimes Joint Investigation Unit Q. Are there any examples of punishment for crypto fraud? The 'V Global' case, where 50,000 victims lost ₩2 trillion, was charged with fraud They used a pyramid scheme to recruit members by promising to triple their investment In cases of pyramid schemes, it is necessary to check for approval from the Fair Trade Commission Q. Will Do-hyung Kwon be extradited to Korea? Do-hyung Kwon was captured in Montenegro Prosecutors have dispatched investigators and are on standby The first CEO of Terraform Labs, who is a co-conspirator, is more likely to be extradited than Do-hyung Kwon Q. What are the charges against Shin Hyun-seong, the 'second-in-command' of Terra-Luna? He faces multiple charges, including fraud, breach of trust, and violations of the Electronic Financial Transactions Act Q. What are the key charges? The Terra-Luna incident is a global issue "Violations of the Capital Markets Act and charges of fraud are being highlighted" Q. What will happen to Do-hyung Kwon after his arrest overseas? Do-hyung Kwon is detained in Montenegro on charges of document forgery... both South Korea and the U.S. have filed indictments Q. Which country’s court will Do-hyung Kwon face? The prosecutor from the District Prosecutor's Office in Montenegro said, "Forgery of passports is the first charge" Q. What is the investigation status in other countries regarding Do-hyung Kwon? Securing custody of Do-hyung Kwon is not easy Do-hyung Kwon may engage in legal battles locally for years, resisting extradition U.S. prosecutors have filed 8 charges against Do-hyung Kwon and reported it to the White House and Congress Q. What will the direction of the investigation be if Do-hyung Kwon is extradited to Korea? "The focus will be on violations of the Capital Markets Act" "There is a need for legal definitions concerning cryptocurrency and its operators"
2023-04-05 NBN NEWS -
Media Coverage
The majority of financial frauds these days are cryptocurrency scams, with methods becoming more decentralized and sophisticated.
With cryptocurrency fraud linked as a motive for the Gangnam kidnapping and murder case, fraud crimes involving virtual assets have once again come under scrutiny. Although statistics from last year show a decrease in virtual asset-related crimes, cryptocurrency fraud continues to be rampant. On the ground, experts believe that many crimes remain hidden as criminal tactics become more sophisticated and operate in fragmented networks. (omitted) As the complexity of cryptocurrency-related fraud increases, front-line police are struggling with investigations. The lack of highly specialized investigators with deep knowledge of blockchain and virtual assets, such as lock-ups and staking, means it can take days just to identify initial cases. As a result, while ordinary financial crimes are typically handled by the economic crimes team, cryptocurrency fraud is increasingly being transferred to the intelligent crime investigation team. Hyeonsu “Elliot” Jin, an attorney at Decent Law Firm, commented, "Recently, cryptocurrency fraud has become more complex, often combined with stock-leading room scams, making it difficult even for local police stations to manage. Cryptocurrency fraud is occurring at an alarming rate. From my experience, it would not be an exaggeration to say that about half of the financial fraud cases currently happening involve cryptocurrency."
2023-04-05 etoday -
Media Coverage
11 months into the 'Luna·Terra Coin' investigation, still shrouded in uncertainty.
While Do Kwon (32), the CEO of Terraform Labs and a key figure in the Terra-Luna coin crisis, has been arrested, the investigation into domestic accomplices has not progressed quickly. With the uncertainty surrounding Do Kwon's extradition to South Korea, arrest warrants for the accomplices requested by the prosecution have been repeatedly dismissed by the court. In the meantime, the prosecution has frozen assets related to the case, worth approximately 230 billion KRW, as part of their effort to seize criminal proceeds, and they are continuing supplementary investigations. (omitted) There has yet to be a domestic precedent that recognizes virtual assets as securities. As a result, some victims are demanding that 'Do Kwon be sent to the United States instead.' However, the prosecution argues that prosecuting Do Kwon in South Korea, where his accomplice Shin is located, would increase the likelihood of a conviction and be more favorable for victim compensation. Pureun “Ian” Hong, a lawyer at Decent Law Firm, stated, "While there is no precedent in South Korea, the difference in how the U.S. and South Korea approach the issue of securities is not that significant." A representative from the Ministry of Justice also commented, "We are comprehensively working to ensure that the Montenegrin judicial authorities decide to extradite Do Kwon to South Korea."
2023-04-04 KUKMINILBO -
Media Coverage
'Impending Ruling' in SEC vs. Ripple Case, Experts Warn of Investment Risks.
As the ruling on the ‘SEC vs. Ripple lawsuit,’ which is expected to be a crucial indicator in determining the security nature of the virtual asset market, approaches, opinions on the outcome remain divided. Investors are betting on Ripple's victory, causing Ripple's price to rise, but experts are warning of investment risks, stating that the lawsuit's outcome is difficult to predict. (omitted) Hyeonsu “Elliot” Jin, managing partner at Decent Law Firm, commented, "If we look at the written arguments submitted with reference to the Voyager bankruptcy ruling, Ripple's arguments hold merit, but that doesn't mean the SEC's stance is weak either,' adding, 'It still seems likely that the case will end in a settlement."
2023-04-01 etoday