Daniel Shin, a co-founder of Terraform Labs, appeared in court on Friday to address whether or not he should be detained for allegedly making illicit profits prior to the dramatic collapse of the Terra-LUNA ecosystem.
Shin is accused of concealing pre-issued LUNA tokens from investors and pocketing 140 billion Won ($105 million) in illicit gains from selling them.
Shin is also accused of violating the Electronic Financial Transaction Act because client data and funds from the fintech company Chai were used for advertising LUNA.
Shin has denied having any connections to Terraform Labs since leaving the company in 2020. It is expected that a decision on whether to authorize his arrest will be made late Friday night or early Saturday.
In addition, the prosecution has requested warrants to detain four Terraform Labs cryptocurrency engineers and three more TerraUSD and LUNA investors.
Following investor accusations against Do Kwon, another co-founder, in May, Terraform Labs is under investigation for possible fraud and tax evasion. Despite Kwon’s claims that he is not on the run, an Interpol red alert has been issued because his whereabouts remain unknown. A 4,000-member retail investor group is also tracking Do Kwon’s whereabouts.
The South Korean Ministry of Foreign Affairs gave Kwon until October 6 to hand over his passport, after which its validity would be permanently revoked.
Kwon reportedly left the UAE and is hiding in an unidentified “third” country. Kwon is said to have passed through Dubai on his way to a third country, where he may have attempted to conceal his “record of arrival.”
The Terra ecosystem collapsed in May 2022, wiping out the $40 billion in investor funds within weeks.
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