Daniel Shin, also known as Shin Hyun-Seong and one of the Terraform Labs co-founders, was summoned to court for questioning after new charges were filed against him and prosecutors sought an arrest warrant.
On March 30, 2023, he appeared in court and answered several questions about his company and the events that led to its demise, including the part he played.
Terraform Labs co-founder Shin Hyun-Seong (Daniel Shin) was interrogated in court on March 30. pic.twitter.com/boG6mGPBix
— Ryan Turner (@dAppTrekker) March 30, 2023
Local media reported that Shin’s appearance in court was to undergo a warrant review for a second arrest. Chief warrant judge Yoo Hwan-woo of Seoul Southern District Court reviewed Shin’s warrant arrest.
The judge reportedly asked Shin several questions regarding the collapse of Terra, including whether he had any comments for the victims of the Terra Luna crash and whether he had ever contacted a representative of Terraform Labs outside of the country.
It’s worth noting that there is no indication that the judge was referring to Do Kwon, with whom Shin founded Terraform Labs. Do Kwon was reportedly apprehended by Montenegrin authorities shortly before Shin’s court appearance. He has been evading law enforcement for some time and is reportedly hiding in Serbia.
The new charges South Korean prosecutors levelled against Shin include financial investment fraud, violations of certain financial regulations, failure to conduct proper examinations, and business exclusion charges. These charges represent an escalation of the legal case against Hyun-Seong as they were not included in the initial lawsuit brought against him.
Shin was previously accused of various offences, including violations of the following; Capital Markets Act (fraudulent and illegal transactions and collusion regulations), the Act on the Aggravated Punishment of Specific Economic Crimes (fraud and breach of trust), the Electronic Financial Transactions Act, the Specific Financial Information Act, as well as breaches of trust.
According to reports, Daniel Shin has been facing the threat of charges in South Korea since November 2022 over allegations that he improperly advertised UST, a now-defunct stablecoin from TerraLuna, as a means of payment. The main claim was that Terraform Labs continued promoting its token as a safe asset that would soon be used in the real world and raising investors’ hopes despite warnings from the Financial Supervisory Agency (FSA) that cryptocurrency payments were not recognized in Korea.
Shin denied the allegations that Terraform Labs misrepresented payment services to increase sales. Though Hyun-Seong maintains his innocence, some Terra-LUNA investors disagree with his claim and have brought forward cases alleging wrongdoing by the company.
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