Arrest Warrant Issue Against Terraform Co-Founder- Here’s Why

According to Yonhap, a South Korean newswire service, authorities are seeking an arrest warrant for Daniel Shin. According to news reports, the co-founder of Terraform Labs is charged with stealing profits and violating the Electronic Financial Transaction Act.

Terra Co-founders to Face Jail Time?

The co-founder of Terraform Labs is being charged for accumulating illicit profits after selling $105 million of LUNA at a market high without notifying investors. Moreover, he has apparently violated the Electronic Financial Transaction Act for utilizing customer data prior to the massive collapse of the blockchain firm’s cryptocurrencies. 

According to the Seoul Southern District Prosecutors Office, warrants were also requested for four Terraform Labs developers who worked on the company’s cryptocurrencies TerraUSD and Luna, as well as three other Terraform Labs investors.

Terraform Labs has been investigated for potential fraud and tax evasion since May, when investors filed complaints against another co-CEO, Do Kwon. Do has been issued an Interpol red notice, but his whereabouts remain unknown.

Prosecutors believe Shin kept Luna, which had been pre-issued without informing regular investors, and pocketed unlawful profits of 140 billion won ($105 million) by selling the tokens at a high price.

Although the Capital Markets Act does not currently have a provision governing stablecoins and bitcoins, prosecutors claimed they consider the Luna cryptocurrency a type of financial investment security.

Shin, though, insists that he is unconnected to Terraform and expressed his profound disappointment at the prosecution for requesting a warrant despite his assistance with the investigation.

In a written statement, he says, “I left (Terraform Labs) two years before the collapse of Terra and Luna and have nothing to do with the collapse.” 

Amid All Of This… Where is Do Kwon?

Prosecutors conducted a raid on Daniel Shin’s home in July as part of their investigation into the suspected offenses. Do Kwon is presently in Singapore, along with the other five individuals included in the warrant. Even though the two nations do not have a bilateral extradition treaty, authorities are looking for international assistance in their efforts to extradite Do Kwon.