Representatives of the USA and South Korea

US, South Korea agree to share investigation data related to Terra collapse

Government officials of South Korea has agreed with their counterparts in the United States government to share digital asset crime investigation data. The agreement will see prosecutors in the two countries make joint efforts to investigate entities and persons connected to the collapsed Terra blockchain.

South Korean news outlet Yonhap News Agency reports that South Korean Justice Minister Han Dong-hoon was in the U.S. to meet with Scott Hartman and Andrea M. Griswold, the chief and co-chief of the Securities and Commodities Fraud Task Force at the U.S. Attorney’s Office for the Southern District of New York.

As a result of the meeting, the Seoul Southern District Prosecutors Office and the Southern District of New York office will exchange their latest findings on the collapse of the Terra stablecoin, TerraUSD (USD), and native token LUNA.

The two sides also agreed to share data on other ongoing digital assets cases, as well as how to strengthen cooperation and information exchange between the two countries to fight securities and financial crimes.

Digital assets regulations getting more attention since Terra collapse

South Korea, the home country of Terraform Labs’ founder and CEO, Do Kwon, has several ongoing investigations to look into the meltdown of the digital assets that wiped off over $40 billion from the market. Prosecutors in the country are considering fraud charges against the company.

South Korea has subpoenaed key present and former TFL employees and is considering issuing a summons for Do Kwon, who is based in Singapore. The employees also have a departure ban imposed on them to prevent them from leaving the country.

South Korea has also made moves to calibrate its digital assets regulations to prevent similar events from occurring. The country has set up a committee to oversee all digital assets regulations pending when its Digital Assets Basic Act (DABA) law will be ready for enforcement in 2024.

In the U.S., the Securities and Exchange Commission (SEC) has an ongoing investigation on Do Kwon. The securities regulator is probing whether the marketing of UST before it crashed violated investor-protection regulations.

The Terra ecosystem implosion has also given regulators globally renewed concern over the entire digital assets market. Both the U.K. and India have stated that if not kept in check with regulations, digital assets could pose a systemic risk to global financial stability.

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