SoKor Authorities Intensity Search for Second Co-founder of Terraform Labs

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South Korean officials have intensified their search for the arrest of Shin Hyun-Seong, commonly addressed as Daniel Shin who is the second co-founder of Terraform Labs. 

The news comes after the first Terraform Labs co-founder, Do Kwon, was apprehended in Montenegro while attempting to board a plane using fraudulent documents.

According to a Bloomberg report, South Korean prosecutors are reportedly trying again to arrest Shin after Kwon was arrested by authorities on March 23, 2023. It states that further efforts are being made by the prosecutors to place Shin in custody. However, they haven’t announced the action publicly. 

Co-founders of Terraform Labs Accused of Fraud

Before Terra’s demise, authorities had already claimed that Shin made over $105 million in earnings through the unauthorized sales of LUNA tokens. Yet, as seen by his LinkedIn profile, Shin asserts that he had no involvement with Terraform Labs beyond January 2020. 

After that, warrants for Shin’s arrest as well as the arrests of three investors and four engineers were requested. The co-founder is accused of fraud, negligence, breaking the law governing financial markets, and unlawful fundraising. 

In addition, authorities in South Korea already suspect that many Terra associates have assisted Do Kwon in promoting risky opportunities to invest using the Terra (LUNA) and TerraUSD (UST) tokens since November 2022.

Meanwhile, Kwon was held by Montenegrin police for the customary 72 hours after being discovered using fake travel documents. Nonetheless, the Montenegrin court granted the prosecutors’ plea to extend Kwon’s incarceration by 30 days. 

One of Kwon’s attorneys intends to appeal against the court’s ruling and ask for a shorter period of custody, claiming there was no intent to use false documents. Kwon was seen by the court as a foreigner whose identification was unclear.

Moreover, the collapse of LUNA and TerraUSD had major consequences for the crypto market overall, with an adverse influence on the functioning of some companies. For instance, the bankruptcy pushed renowned cryptocurrency lenders Celsius Network and Voyager Digital.

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