Kwon, the infamous CEO and co-founder of Terraform Labs, is at the center of a violent storm because of the meteoric crash of Terra's algorithmic stablecoin UST and native token LUNA. But while many want the 30-year-old to serve time in prison, legal experts think this might not happen at all.

Binance CEO CZ already deployed the company's in-house investigating team to get to the bottom of the allegations Kwon was accused of, including committing fraud and money laundering. South Korea has also assembled several teams that would handle the investigation of Kwon and his company Terraform Labs.

Bringing Crypto Mainstream DeFi and Beyond 4-36 screenshot
As a part of SKALE network's mainnet launch series, our CEO, Do Kwon joined Jack O'Holleran CEO of SKALE Labs and Simon Seojoon Kim CEO and managing partner from Hashed talked about bringing crypto mainstream in this panel talk. YouTube Screenshot/Terra Offiicial YouTube Channel

To send the CEO and his associates to prison, prosecutors will have to prove beyond reasonable doubt that they committed criminal fraud, which requires proof of Kwon's intent to deceive investors.

"We’re trying to prove what was going on in someone’s mind. That’s often a very painstaking process that involves reviewing lots and lots of documents, and talking to many, many people and dealing with all their lawyers through that process and scheduling grand jury time and court appearances," Randall Eliason, a law professor, writer, and frequent media commentator on issues related to corporate and white-collar crimes told CNBC.

Former prosecutor and trial attorney Renato Mariotti noted that even if prosecutors can show that false statements were made by the defendant, they still need to prove the state of mind beyond the reasonable doubt of the accused. "Because we don’t have a magic telescope to read a person’s mind, prosecutors often rely on emails, texts, tweets and other statements," he said.

Authorities in South Korea have already invited all Terraform Labs employees and developers but so far, nothing has come out of the investigation just yet.

Terra 2.0's new token LUNA was trading up 3.87 percent at $6.61 with a 24-hour volume of $527,333,940 as of 5:16 a.m. ET on Friday based on the data from cryptocurrency aggregator CoinMarketCap.