- South Korean prosecutors are trying to arrest fintech entrepreneur Daniel Shin for his involvement in Terraform Labs.
- Co-founder Do Kwon was arrested in Montenegro and both the US and South Korea seek his extradition.
- The collapse of TerraUSD and Luna caused a $60 billion loss and triggered a series of crises in the cryptocurrency market.
Reports suggest prosecutors in South Korea are attempting to arrest Daniel Shin, a fintech entrepreneur who was involved in establishing the Terraform Labs cryptocurrency project, which experienced a $60 billion loss in the previous year.
On Monday, the prosecutor’s office in Seoul confirmed that they are making a renewed effort to arrest Daniel Shin, but they did not disclose any additional information regarding the matter. This latest development comes after Do Kwon, the other co-founder of Terraform Labs, was apprehended in Montenegro last week.
Both South Korea and the US are currently seeking the extradition of Do Kwon to face trial on charges associated with the collapse of TerraUSD, an algorithmic stablecoin, and its related token, Luna, in May 2022. The implosion of these tokens triggered a series of crises within the cryptocurrency market, exacerbating a $2 trillion downturn in digital asset values.
According to Shin’s attorneys, he separated from Terraform Labs in 2020 and has not been involved in its operations since then. In December of last year, a court in South Korea rejected an earlier attempt by prosecutors to obtain an arrest warrant for Shin, citing difficulty in believing that he would flee or destroy evidence.
Moreover, Seoul prosecutors announced last year that Shin was facing charges including fraud, breach of duty, violation of capital markets law, and illegal fundraising.
After Seoul requested his arrest, Kwon became a fugitive and his whereabouts were unknown until his arrest last week. According to officials in Montenegro, he was attempting to fly to Dubai using false travel documents when he was detained on Thursday.
Kwon’s lawyer stated over the weekend that Kwon denies allegations that he attempted to leave Montenegro using a fake passport. The US has accused Kwon of fraud, while the South Korean charges against him include breaches of capital markets law.
Stablecoins, such as TerraUSD, are designed to maintain a constant value, usually set at $1. The failure of TerraUSD and its related token, Luna, was the most significant and notable collapse ever witnessed in the stablecoin market.