Reports state that Shin Hyun-seong (also known as Daniel Shin), one of the co-founders of Terraform Labs, was questioned in a South Korean court for his possible involvement in the collapse of the project’s native token, LUNA, and its algorithmic stablecoin, UST, which caused around $40 billion in investor losses last year. Do Kwon, the main culprit, was recently arrested in Montenegro after being on the run for several months.
Shin appeared at the Seoul Southern District Court on March 30 to provide information regarding Terra’s downfall. However, he refused to answer questions from reporters concerning his alleged solicitation for adoption of a Tmon payment method and issuance of it, despite being aware of the possibility of Terra and LUNA collapsing. The Korean authorities charged Shin with violating several acts, including the Capital Markets Act, Electronic Financial Transactions Act, and Act on the Aggravated Punishment of Specific Economic Crimes, among other offenses.
The Seoul Southern District Prosecutors Office suspected that Shin made illegal profits before the LUNA/UST failure by storing LUNA tokens without notifying relevant watchdogs and later selling them for $106 million. Law enforcement agencies confiscated those funds in November last year. Nonetheless, Shin denied his involvement in Terraform Labs’ operations since 2020 and his responsibility for the multi-billion collapse.
Do Kwon’s Arrest
After months of allegedly hiding in different countries, 31-year old developer Do Kwon was detained in Montenegro with falsified Belgian identification and a fake Costa Rican passport. US prosecutors blamed him for Terra’s downfall and charged him with securities fraud, commodities fraud, and conspiracy. Kwon’s legal defense is expected to appeal the 30-day remand order, but his deportation to either South Korea or the USA remains likely.