The spouse of Terraform Labs founder Do Kwon has secured a significant legal victory against the South Korean government. A Seoul court ruled in her favour, allowing her to retain ownership of valuable real estate assets that were previously frozen. This ruling is part of the ongoing investigation into the Terra-Luna collapse.
The court’s decision challenges the government’s initial asset preservation order. It raises important questions about the boundaries between personal and business assets in cryptocurrency-related legal cases. It also highlights the complexities of investigating and prosecuting cases in the crypto industry. Ownership and financial flows can be difficult to trace.
The Seoul Southern District Court’s June 19th ruling marks a comprehensive win for Do Kwon’s wife. She won all third-party objection lawsuits against the government’s asset seizure efforts. The court determined that the property should be classified as the wife’s special property. It was acquired during her marriage to Kwon.
The assets at the centre of this case include real estate in Seoul’s Seongsu-dong and officetel sales rights in Nonhyeon-dong. These properties were initially frozen as part of a substantial 233.3 billion won ($177 million) asset preservation order against Kwon. However, the court has now suspended the execution of foreclosure on these properties. This suspension is pending final confirmation of the judgment.
A key factor in the court’s decision was the presumption that the real estate shares and officetel sales rights are the wife’s special property. The assets were acquired in March and May 2021, during the couple’s marriage. The court dismissed the government’s assertion that the properties were actually owned by Kwon and only nominally held in his wife’s name.
Evidence presented in court indicated that Kwon’s wife used funds from her own virtual asset account to make the down payment on the Seongsu-dong property. This finding played a crucial role in the court’s decision to recognise the assets as her special property.
This legal victory for Kwon’s family comes amid ongoing legal troubles related to the collapse of the Terra-Luna cryptocurrency ecosystem. While his wife has secured this win, Kwon himself remains a fugitive. He is wanted on charges of violating capital market laws.
Terraform Labs and Kwon have tentatively settled with the U.S. Securities and Exchange Commission (SEC) over fraud charges. This agreement follows a jury’s April verdict. The jury found Kwon and his company liable for deceiving investors about their cryptocurrency products. The settlement is expected to include specific penalties and restrictions on Kwon’s future financial activities.
However, the settlement has not been without criticism. Coinbase’s Chief Legal Officer, Paul Grewal, has expressed concerns about the SEC’s $4.47 billion settlement with Kwon and Terraform Labs. He questions its ability to provide practical solutions for Terraform’s victims. This criticism highlights the ongoing debates surrounding regulatory actions in the cryptocurrency space and their effectiveness in protecting investors and maintaining market integrity.
