South Korea’s National Assembly has summoned Terraform Labs Pte. Ltd. cofounder Shin Hyun-sung, also known as Daniel Shin, to testify at its upcoming parliamentary audit of the Financial Services Commission (FSC), the country’s top financial regulator.
When Shin testifies on Oct. 6, he will likely be probed on the crash of Terraform’s stablecoin project and cryptocurrency in May which led to a US$40 billion drop in investor wealth, according to some estimates. However, the subjects to be covered by the parliamentary questions haven’t been disclosed to the public.
Local media reports have cast doubts on the efficacy of questioning Shin, as he has claimed to have severed ties with Terraform Labs cofounder and chief executive officer (CEO) Kwon Do Hyung, better known as Do Kwon, in 2020 after Shin left the company.
Shin has since founded fintech payment firm CHAI Corp. and currently serves as chief executive officer (CEO). In a WSJ interview of Kwon, the newspaper cited a CHAI spokesperson to state that Kwon and Shin parted ways in March 2020.
An Achilles heel
Nevertheless, local media reports have alleged that Shin’s company used deposits held by its customer deposits to help out Terraform. A spokesperson for CHAI did not immediately respond to Forkast’s request for a comment sent outside of normal business hours in South Korea on Friday.
In July this year, Shin’s private residence was among the places raided by South Korean prosecutors investigating the Terra-LUNA collapse.
South Korea has yet to locate Kwon despite the issuance of an arrest warrant for Kwon and his associates on Sept. 14. Authorities have also sought to nullify their passports and got the International Criminal Police Organization or Interpol to issue a “Red Notice.”
The National Assembly has also summoned Kim Ji-yun, the chief executive officer (CEO) of South Korea-based blockchain infrastructure provider DSRV Labs. The Samsung-backed company had participated as a validator in the proof-of-stake Terra blockchain.
Meanwhile, the National Assembly, South Korea’s unicameral legislature, is also summoning representatives from local crypto exchange owners Dunamu Inc. and Bithumb Holdings Co. Ltd.
Dunamu chief executive officer (CEO) Lee Sir-goo and Bithumb Holdings’ former chairman Lee Jung-hoon will answer queries on issues surrounding their respective crypto exchanges, Upbit and Bithumb. Together, the two exchanges account for over 90% of South Korea’s crypto trading volume.