The co-founder of Terraform Labs, Shin Hyun Seung, also known as David Shin, has been summoned this week for allegedly making money with the cryptocurrency LUNA, now known as the Luna Classic (LUNC).
The prosecutors are accusing Shin of breach of duty and using Chai Corporation and customer information to promote Terra’s stablecoin and Luna cryptocurrency allegedly.
If you recall, in 2020, Shin testified that he severed relations with Do Kwon and the Terraform Labs. At that point, he began working at Chai Corporation, a provider of payment technology, where he currently holds the positions of CEO and Founder.
Terraform Labs Co-founders in the net
This is not the first time there have been prosecutions against Terraform Labs Co-founders. In May 2022, the Terra stablecoin and Luna cryptocurrency crashed after an unidentified $2 billion UST was anonymously withdrawn.
Following the cryptocurrency crash in July 2022, the CEO of Terraform Labs, Do Kwon, was also charged with breaking a local capital market regulation. Do Kwon, the CEO of Terraform Labs has been given a “notice upon arrival.” In contrast, Shin Hyun-Seung, a co-founder of Terra, has been given a travel ban by South Korean prosecutors looking into Terra-LUNA.
Recently, Forkast reported that a prosecutor from the Seoul Southern District Prosecutors’ Office confirmed that Shin was charged with storing pre-issued LUNA tokens without informing regular investors and then allegedly earning profits of over 140 billion Korean Won (over US$106 million) when he sold the tokens at a high point. This has been flagged as fraudulent and a violation of the local capital market law.
How is it going now?
The prosecution also obtained arrest warrants for five additional Terraform Labs associates, including the former director of research at Terra, Nicholas Platias, and the CEO of Chai Corporation, Han.
Legal actions against Kwon and Terra confirm the claim investigators were looking into the Terra-LUNA collapse for possible fraud.
The authorities will also question Shin about whether he was aware of the alleged insider trading and price manipulation by Terraform Labs to support the price of the Luna cryptocurrency.
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