The implosion of Terra (LUNA) was one of the devastating events in the crypto space last year. Investors lost most of their funds worth billions of dollars, and other crypto asset prices plunged drastically.

Subsequently, South Korean prosecutors have been investigating the crisis. As a result, they have arrested what is said to be a significant player relating to the collapse of the Terra (LUNA) ecosystem.

Prosecutors To Arrest Former CEO Of TMON

Recently, South Korean prosecutors filed an arrest warrant for the former CEO of an e-commerce giant, TMON, who was identified as ‘Mr. A’. A local news outlet, Dong-AIlbo, this recent move from the Seoul Southern District Prosecutor’s Office. 

The statement alleges that the former executive received bribes in Terra (LUNA) tokens worth billions of South Korean won. The funds were meant to facilitate the introduction of LUNA as a payment option on the TMON platform.

Also, a broker, whose name is withheld, was implicated in the bribery incident and will be arrested. The report noted that the review for the arrest warrant would be on February 17.

The prosecutors think that the management of Terra made grave mistakes in their handling of the operations of the crypto asset.

They believed that the co-founder of Terraform Labs, Daniel Shin, could have approached the former TMON CEO with an inappropriate request. Their deal centered on promoting the Terra (LUNA) by including the token as part of the payment options on the e-commerce platform.

Notably, Shin is the co-founder of TMON and could have manipulated his request. The former executive of TMON is believed to have received some LUNA coins as a bribe for the request. Further probe into the issue disclosed that the former executive of TMON cashed out the LUNA tokens believed to be worth billions of South Korean won.

Following the alleged bribery, the former TMON CEO ensured that TMON released several advertisement articles on Terra. It also introduced using LUNA as a payment method on the platform.

The entire stage management for Terra expanded the token’s perception in the crypto space and spiked demand for LUNA. Subsequently, many crypto exchanges started listing Terra (LUNA) due to increasing user demand and a rising token price.

South Korea And Crypto Regulation After Terra (LUNA) Fiasco

South Korea has recently taken a stricter stance in its crypto regulatory approach since the Terra collapse. To this end, the South Korean Financial Services Commission (FSC) new guidelines defining tokens as securities to help securities companies and token issuers understand the class of their services.

According to the regulator, security tokens are those digitized with distributed ledger technology. This classification for security tokens places South Korea in sync with the rules in other countries within the Asian region.

Most firms with security licenses embrace the regulatory clarity from the South Korean regulator. However, a prominent and large securities firm in the country, Shinhan Investment and Securities, has for an alliance with others. Shinhan cited the benefits of token securities for investors while complying with the set standards in token issuance and trades.