South Korean prosecutors said they may charge Terraform Labs Pte. cofounder Daniel Shin with fraud for promoting the now collapsed Terra-Luna stablecoin as a payment method despite multiple warnings from financial regulators that it was against the law.

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Fast facts

  • Shin, whose full name is Shin Hyun-seung, said repeatedly in 2018 that the Terra stablecoin will be available as a payment method on e-commerce platforms for users in South Korea, local media outlet YTN reported
  • However, the Financial Supervisory Service told Shin multiple times that virtual assets cannot be registered as a payment method under the Electronic Financial Transactions Act, the report said
  • Choi Sung-kook in the Seoul Southern District Prosecutors’ Office confirmed the YTN report to Forkast, which included that the prosecutors are considering charges of fraud against Shin under the Capital Markets Act and whether to issue an arrest warrant.
  • Shin founded Terraform Labs, which issued the Terra-Luna stablecoin, with Kwon Do-hyung, or Do Kwon, in 2018. Do Kwon was the chief executive officer of the company.
  • South Korean authorities are investigating Terra-Luna, which collapsed in May this year and 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 are unknown.

See related article: Terra cofounder Daniel Shin denies $100 mln LUNA cashout: report