Shin Hyun-seung, the cofounder of Terraform Labs Pte. Ltd. and also known as Daniel Shin, has been summoned by South Korean prosecutors to attend an investigation this week as a suspect for allegedly earning ill-gotten profits with LUNA, now renamed the Luna Classic (LUNC) cryptocurrency.
See related article: Crypto fugitive Do Kwon said to be hiding in Europe, mocks ‘cops from world over’ in series of tweets
Fast facts
- Choi Sung-kook, prosecutor under the Seoul Southern District Prosecutors’ Office, confirmed local reports of the summons with Forkast.
- Shin is accused of storing Luna tokens which had been pre-issued without notifying regular investors and then allegedly earning profits over 140 billion Korean won (about US$106 million) when he sold the tokens at a high point.
- South Korean prosecutors consider this transaction as fraudulent and as a violation of the local capital markets law, as they have reached a decision to view Luna cryptocurrency as a financial investment security.
- Shin claims to have cut ties with Terraform Labs and chief executive officer (CEO) Do Kwon in 2020, when he moved on to payment technology company Chai Corporation, in which Shin is currently serving as founder and chief executive officer (CEO).
- However, the prosecutors are also accusing Shin of breach of duty, as the customer information and funds of Chai Corporation were allegedly used to promote Terra’s stablecoin and Luna cryptocurrency.
- The prosecutors will also question Shin on whether he knew of the insider trading and price manipulation allegedly conducted by Terraform Labs to prop up the price of Luna cryptocurrency.
- South Korean authorities have been investigating the collapse of Terra-LUNA back in May this year, which caused losses to hundreds of thousands of investors worldwide. While they have issued an arrest warrant and have Interpol’s help in tracking Do Kwon, the whereabouts of the Terra CEO is still unknown.
See related article: Crypto leaders differ over Do Kwon blame in May’s market crash