A South Korean court has again dismissed the arrest warrant for Terraform Labs co-founder Daniel Shin who is being investigated for fraud. Shin was accused of illegally profiting from the sale of more than $100 million of the luna cryptocurrency before its collapse.
Seoul court lets Terraform co-founder free citing low risk of theft
The Seoul Southern District Court has rejected a request from the prosecutor’s office for the pretrial detention of Shin Hyun-seung, co-founder of bankrupt blockchain company Terraform Labs, also known as Daniel Shin. It is believed to have played a key role in the collapse of the company’s cryptocurrencies, luna and the stablecoin terrausd.
On Thursday, the warrant for Shin’s arrest was denied for a second time, with the court saying he was unlikely to pose a flight risk or destroy evidence, Yonhap news agency reported. The crypto entrepreneur is under investigation for illegal profits made before the coin crash last year.
Prosecutors first requested a warrant for Shin’s arrest in November, and the court denied their initial request. They filed the warrant again after the arrest last week of Do Kwon (Kwon Do-Hyung), another of the founders of Terraform.
Kwon was arrested in Montenegro while trying to board a flight to Dubai. The South Korean authorities are seeking his extradition, which may take time. According to his Montenegrin lawyer and the country’s justice minister, he will first be tried in the Balkan nation for traveling with a fake Costa Rican passport.
In South Korea, Daniel Shin faces multiple charges of fraud and violation of laws governing capital markets, financial transactions and information. He is suspected of hoarding pre-issued luna, obtaining 140 billion won (nearly $108 million) by selling the tokens at a high price, and failing to inform investors of the risk of collapse of both cryptocurrencies.
Shin would also be responsible for using customer information and funds from a fintech company he ran, Chai Corp., to promote Luna. He has denied all such accusations, insisting he was not connected to Terraform Labs after leaving the company in March 2020, when he founded Chai Corporation.
According to a report by KBS, South Korea’s national broadcaster, the Seoul court acknowledged that the charges had been largely verified but stressed that the risk of destruction of evidence was mitigated with Kwon’s arrest. He also stressed the need to allow Shin to exercise his right to defend himself.
Montenegro Interior Minister Filip Adžić revealed this week that investigators found three laptops and five mobile phones belonging to Kwon containing a lot of “very interesting” information. At a press conference with Montenegrin Justice Minister Marko Kovač in Podgorica, officials said South Korea and the United States, which is also seeking Kwon’s extradition, had both requested the devices.
What do you think of the South Korean court’s decision to deny the arrest warrant for Terraform co-founder Daniel Shin? Share your thoughts on the case in the comments section below.
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