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Prosecutors Seek Arrest Warrant for Daniel Shin & Seven Other Terraform Players

Tim Alper
Last updated: | 2 min read
Source: UDC/YouTube

South Korean prosecutors have asked a court to issue an arrest warrant for the Terraform Labs Co-founder Daniel Shin (Korean name Shin Hyun-Seong) – as well as a group of “early” Terra ecosystem “investors.”

Multiple media outlets, including the national broadcaster KBS, stated that the Seoul Southern District Prosecutor’s Office has asked a court in the South Korean capital to issue arrest warrants for “a total of eight people, including four early investors.” Shin was identified as belonging to this group.

The remainder were described as “four key individuals” who were involved in Terra ecosystem “technology development.” Shin, like his missing Terraform Co-founder Do Kwon, had previously been heralded as a budding tech pioneer. He has founded fast-growing tech firms like the payments company Chai Corporation.

The media outlets claimed that prosecutors suspect Shin and the seven others of “violating the Capital Markets Act” in “connection with the collapse of the [Terra Luna Classic] cryptoasset.”

LUNC prices on 30/11/2022. (Source: CoinMarketCap)

The coin, formerly known as LUNA (now LUNC), plummeted to record lows in early May. But suspicion has fallen on Terraform executives – who appeared to have shuttered their South Korean businesses and moved abroad shortly before the crash.

Prosecutors have also accused the group of violating crypto-specific laws, as well as fraud laws and the Electronic Financial Transaction Act. They believe Shin may have made “unfair profits” worth almost $107 million by selling his LUNC holdings when the coin’s value grew.

He is also reportedly accused of “using customer information held by Chai” to promote Terra ecosystem coins.

Daniel Shin Speaks out After Prosecutors Make Move

Shin’s legal team issued a statement upon hearing the prosecution’s decision. Shin claimed that he had “left the company two years ago and had nothing to do with the collapse” of Terra coins.

His team said Shin had “expressed strong regret that the prosecution had requested an arrest warrant.” Prosecutors have been investigating Shin since shortly after the collapse. His home was raided in July. Prosecution officers also searched Chai Corporation offices earlier this month.

Shin was also summoned for questioning on November 17, and has previously been “investigated over suspected violations” of the Capital Market Act and breach of trust-related issues,” KBS noted.

Earlier this week, a top financial regulator stated that it had “warned” Shin and Kwon not to launch Terraform back in 2018, but claimed that its concerns had been “ignored.”