South Korea issues arrest warrant for former Terraform Labs CEO

Prosecutors’ Office alleges that Daniel Shin made $105m through illicit token sale

Prosecutors in Seoul have issued arrest warrants for investors and engineers linked to Terraform Labs – Photo:Shutterstock

South Korean prosecutors have announced that they have requested arrest warrants for eight individuals linked to the alleged fraud involving Terraform Labs and the collapse of Luna and TerraUSD. 

TerraUSD, a stablecoin, depegged from the US dollar in May and saw its market capitalisation sink by $18bn (£15bn) within a week. The failure had a simultaneous knock-on effect on Luna, which suffered a $40bn drop in market capitalisation.

Authorities step up hunt for Terraform Labs executives 

Terraform Labs’ co-founder and CEO, Do Kwon, fled Singapore after the disintegration of his empire and is currently thought to be living somewhere in Europe. 

In September, a court issued a warrant for Kwon and five others and began the procedure of placing the South Korean national on the Interpol red notice list and revoking his passport. 

Expanding its battle on Wednesday, the Seoul Southern District Prosecutors Office issued an arrest warrant for Terraform Labs co-founder Daniel Shin and several other engineers and investors. 

It alleged that Shin secured profits worth 140 billion won ($105m) by selling Luna tokens during the bull market, which had actually been issued to him before Terra’s initial coin offering (ICO) without public knowledge. 

Authorities also charged Shin with using user data from his separate fintech business Chai to promote Luna. If true, this would constitute a violation of the Electric Financial Transaction Act.

The former CEO’s lawyer rejected the allegations, stressing that Shin “left the company two years ago and has nothing to do with the collapse of Terra Luna.”

The lawyer said: “Despite our co-operation, we express strong regret that the prosecution requested an arrest warrant."

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