South Korean authorities have frozen some properties belonging to Daniel Shin, who co-founded Terraform Labs alongside Do Kwon, and 9 other individuals with close ties to Terra (LUNA). However, a local court recently ruled that the LUNA token cannot be considered a security, and therefore cannot be regulated as an investment product.
The authorities are seriously looking into the Terra case
According to information from Bloomberg, Daniel Shin (Shin Hyun-Seung), who co-founded Terraform Labs alongside Do Kwon in 2018been charged with multiple counts with 9 other individuals also linked to Terra (LUNA) in South Korea.
The latter have, among other things, been charged with illegal trade and breach of trust. The South Korean authorities also told them confiscated the equivalent of 246.8 billion wonor approximately $184.7 million.
Although Daniel Shin was closely involved in the evolution of Terra, the latter, however, separated from the project in 2020, i.e. 2 years before its implosion caused by the fall of the LUNA UST. It is for this reason that he could not be arrested, the court having ruled that he was not at risk of fleeing or hiding evidence in view of his decision to leave Terra.
According to the Seoul prosecutors’ office, the project of Daniel Shin and Do Kwon (Kwon Do-Hyung) was doomed from its conception, the algorithmic stablecoin structure relating to the UST being “unsustainable”.
At the same time, Daniel Shin and the 9 other individuals are accused of having caused “astronomical damage” by generating 347 million dollars in profits. Of this amount, 184 million dollars have already been frozen by the authorities.
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As we said, Daniel Shin is not, for the moment, likely to be imprisoned in view of his situation. He remains free pending trial. and is said to have already started to cooperate with the local authoritiesaccording to his lawyer:
” [Il n’a] nothing to do with the collapse, as he had left the company 2 years before the fallout. He voluntarily returned to South Korea immediately after the collapse and has been faithfully cooperating with the investigation for more than 10 months, hoping to help set the record straight. »
Without giving details, South Korean authorities also said they were working in concert with the United States. Do Kwon, awaiting trial behind bars in Montenegro for possession of false identity documents, should also be then extradited to the United States or South Korea.
The outcome of this case, however, is complicated to predict, a South Korean court having very recently ruled that the LUNA token could not be considered as a security. and therefore that it could not be regulated as a classic investment product. On the U.S. side, Do Kwon’s attorneys denied any allegation of securities fraud before the SEC.
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Source: Bloomberg
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
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