Prosecutors in South Korea think that there exists a possibility for Daniel Shin, one of the Co-Founders of Terraform Labs Pte., to be indicted for his involvement in some fraudulent acts.
Part of his offense was promoting the Terra-LUNA stablecoin which collapsed as a payment option. Before this time, several warnings have been issued by financial regulators in this regard but were all violated by the Terraform Lab executives.
Investigations on Shin whose full name is Shin Hyun-Seung, have been ongoing for some time now especially, after the sudden crash of the touted stablecoin.
In July, there was a report that his home was raided several times by South Korean prosecutors as part of a probe. The South Korean Joint Financial and Securities Investigation Team ransacked Shin’s home and his payment application Chai Corp.
At that time, they were searching for any illicit activity or document that could tie the Co-founder to the collapse of TerraUSD (UST) and the Terra ecosystem.
Apart from raiding Shin’s house, many other entities were equally investigated including cryptocurrency exchanges like Bithumb, Upbit, and Coinone. Even some employees at Terraform who were suspected to be part of some wrongdoings were investigated.
Terraform Labs Goes Under Investigation
Daniel Shin founded Terraform Labs in 2018 with Do Kwon who has been under the radar of regulators since the crash of their native stablecoins. Many times in 2018, Shin touted Terra-LUNA as a payment method that would be available to South Koreans on ecommerce websites.
During that period, the Financial Supervisory Service warned him severally, saying that Virtual Assets (VAs) cannot be registered as a payment method under the Electronic Financial Transactions Act.
Do Kwon, the Chief Executive Officer (CEO) of Terraform Labs was declared missing from Singapore in September amidst his investigations. Although he claims not to be hiding, many regulators believe that he is trying to evade summons.
“I am not ‘on the run’ or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide. We are in the process of defending ourselves in multiple jurisdictions – we have held ourselves to an extremely high bar of integrity, and look forward to clarifying the truth over the next few months,” Do Kwon tweeted