Terraform Labs Pte. Ltd. cofounder Shin Hyun-seung, also known as Daniel Shin, and seven other Terra associates attended a court hearing on Friday morning in South Korea that will decide on local prosecutors’ request to issue an arrest warrant on the eight individuals.

See related article: S.Korea requests warrant to bring Terra-Luna cofounder Daniel Shin into custody

Fast facts

  • The Seoul Southern District Court started interrogating Shin and Terra associates Friday morning to make a direct judgment of the arrest warrant requested by local prosecutors on Tuesday.
  • Choi Sung-kook, prosecutor at the Seoul Southern District Prosecutors’ Office, told Forkast that the court decision is expected to be announced late night Friday in Asia.
  • The seven others included in the warrant include early investors and engineers of Terraform Labs, some of whom prosecutors believe had a hand in developing the collapsed Terra stablecoin and sister Luna cryptocurrency. It is reported that one of the individuals is the CEO of Kernel Labs, a blockchain consultancy firm established by former Terra developers.
  • South Korean prosecutors accuse Shin and others of fraud, violation of the Capital Markets Act and the Electronic Financial Transactions Act, and breach of duty.
  • According to the prosecutors, Shin allegedly made illegitimate profits of over 140 billion Korean won (about US$107 million) through the LUNA cryptocurrency, promoting the Terra stablecoin as a payment method despite multiple warnings from regulators, and misusing users’ private information of Chai Corporation to promote Terra-Luna. Shin founded and served as CEO of payments tech firm Chai from 2019, but reportedly stepped down earlier this year.
  • Shin has denied the allegations, saying he sold over 70% of his Luna holdings before the price surge, and still held a significant amount of LUNA during the collapse in May. Shin also claims that the financial authorities have never expressed their disapproval for incorporating crypto in e-commerce payments.
  • South Korea has been investigating the collapse of the Terra-Luna project in May, which resulted in losses to hundreds of thousands of investors worldwide. Despite various efforts to arrest Terra CEO Kwon Do-hyung, or Do Kwon, his whereabouts remain unclear. Prosecutors have previously confirmed with Forkast that Do Kwon last flew from Singapore to Dubai, and on to Europe.

See related article: Terra-Luna cofounder Daniel Shin may face fraud charges in South Korea, prosecutors say