South Korean Crypto Hearing Stumbles as Witnesses Skip Out

Following the recent crypto industry failures, South Korean lawmakers held hearings to question industry representatives. However, only two witnesses appeared, leaving lawmakers frustrated and calling for charges against the absentees. Terra's collapse and other incidents have prompted increased scrutiny, and the hearings sought to investigate these events. The non-attendance of key figures, including Terra's Do Kwon and Bithumb's Lee Jung-hoon, has drawn criticism and raised concerns about accountability in the industry.

South Korean Lawmakers' Hearing on Crypto Industry Mishandling Falls Short as Witnesses Fail to Attend

Seoul, South Korea - A hearing convened by South Korean lawmakers to scrutinize the recent failures within the cryptocurrency industry has been met with disappointment as only two out of five summoned witnesses appeared to provide testimony.

The National Assembly's hearings, which commenced on Monday, were intended to investigate the collapse of multibillion-dollar enterprise Terraform Labs and other notable crypto industry downfalls. However, the absence of key witnesses has frustrated lawmakers and raised concerns about the industry's accountability and willingness to cooperate with oversight efforts.

Lawmakers Express Frustration and Call for Charges

The hearings concluded with lawmakers expressing their exasperation at the no-shows, as reported by CoinDesk Korea. Several parliamentarians have called for criminal charges to be filed against those who failed to attend, according to the Korea Times.

The failure of witnesses to appear has hindered the assembly's investigation into Terra's collapse, which triggered one of the most severe market downturns in the history of cryptocurrencies. The incident has prompted lawmakers to advocate for heightened oversight and a more stringent regulatory approach towards the crypto industry.

Absence of Key Figures Draws Criticism

Unable to compel Terra co-founder Do Kwon, who is believed to have fled South Korea and is potentially facing international fugitive status, to testify before the assembly, lawmakers selected representatives from the domestic crypto industry to field questions.

Lee Seok-woo, CEO of Dunamu, which operates Upbit, South Korea's largest crypto exchange, attended as a witness to address a system failure that occurred on the platform. He had previously provided testimony on the Terra collapse during an audit conducted earlier this month by the Financial Services Commission, the country's top financial regulator.

Notable absentees included Lee Jung-hoon and Kang Jong-hyun, former chairman and current shareholder of crypto exchange Bithumb, respectively. Additionally, Simon Kim, CEO of venture-capital firm Hashed, and Chai CEO Daniel Shin, co-founder of the Luna network built on the Terra blockchain, failed to appear.

"The continued absence of representatives such as Daniel Shin, who bears significant responsibility for the LUNA incident, is a blatant disregard for the 280,000 victims," stated lawmaker Yoon Sang-hyun, as reported by Chosun Ilbo.

Luna, a digital token linked to Terra's stablecoin, imploded alongside the collapse of the Terra network in May. Shin has stated that he was unable to attend as a witness and answer questions on the matter due to an ongoing investigation by South Korean prosecutors, according to CoinDesk Korea.

Excuses and Questions Raised

Bithumb's CEO, Lee Jae-won, attended the hearing in the absence of Lee Jung-hoon, despite not being initially included on the witness list. Prosecutors have charged Lee Jung-hoon with embezzling $70 million in a business transaction. He attended his trial in person on Tuesday.

Monday's hearing also intended to examine suspicions of price manipulation involving the ARW coin and shed light on the ownership structure of Bithumb, according to CoinDesk Korea.

Lee Jae-won cited depression and a panic disorder as his reasons for not attending the hearing on Monday, as reported by CoinDesk Korea. Both Lee and Shin were also absent from a previous Terra-related audit conducted by the Financial Services Commission earlier this month.

Hashed's Kim similarly cited his mental state for his absence at the hearing. "I have been suffering from anxiety and panic disorders due to extreme mental stress since the Luna-Terra crash," said Kim, whose firm was an early investor in Terraform Labs.

Kang also submitted a written explanation for his absence. CoinDesk has reached out for comment.

In South Korea, failing to appear at a hearing without a justifiable reason is punishable by imprisonment for up to three years or fines ranging from 10 million to 30 million won (approximately $7,000 to $21,000).

Both the ruling and opposition parties had reached a consensus to press charges against Lee Jung-hoon if he failed to attend the hearings, as reported by CoinDesk Korea.

Lawmaker Baek Hye-ryeon stated during the hearing, "It appears that the witnesses did not attend nor provide acceptable reasons. Once both parties reach an agreement, we will file a complaint."

A source close to the lawmakers informed CoinDesk that the National Assembly hearings have concluded, but their pursuit of accountability for Terra, Bithumb, and Hashed will continue.