Terra cofounder Daniel Shin makes court appearance for arrest warrant review

Terraform Labs Pte. Ltd. cofounder Shin Hyun-seung, also known as Daniel Shin, and seven other Terra associates attended a court hearing on Friday morning in South Korea that will decide on local prosecutors’ request to issue an arrest warrant on the eight individuals.

Fast facts

The Seoul Southern District Court started interrogating Shin and Terra associates Friday morning to make a direct judgment of the arrest warrant requested by local prosecutors on Tuesday.
Choi Sung-kook, prosecutor at the Seoul Southern District Prosecutors’ Office, told Forkast that the court decision is expected to be announced late night Friday in Asia.
The seven others included in the warrant include early investors and engineers of Terraform Labs, some of whom prosecutors believe had a hand in developing the collapsed Terra stablecoin and sister Luna cryptocurrency. It is reported that one of the individuals is the CEO of Kernel Labs, a blockchain consultancy firm established by former Terra developers.
South Korean prosecutors accuse Shin and others of fraud, violation of the Capital Markets Act and the Electronic Financial Transactions Act, and breach of duty.
According to the prosecutors, Shin allegedly made illegitimate profits of over 140 billion Korean won (about US$107 million) through the LUNA cryptocurrency, promoting the Terra stablecoin as a payment method despite multiple warnings from regulators, and misusing users’ private information of Chai Corporation to promote Terra-Luna. Shin founded and served as CEO of payments tech firm Chai from 2019, but reportedly stepped down earlier this year.
Shin has denied the allegations, saying he sold over 70% of his Luna holdings before the price surge, and still held a significant amount of LUNA during the collapse in May. Shin also claims that the financial authorities have never expressed their disapproval for incorporating crypto in e-commerce payments.
South Korea has been investigating the collapse of the Terra-Luna project in May, which resulted in losses to hundreds of thousands of investors worldwide. Despite various efforts to arrest Terra CEO Kwon Do-hyung, or Do Kwon, his whereabouts remain unclear. Prosecutors have previously confirmed with Forkast that Do Kwon last flew from Singapore to Dubai, and on to Europe.