SEC to Question Terra Co-Founder Daniel Shin: Details
- The SEC seeks to question Terraform Labs co-founder Daniel Shin in South Korea.
- The regulators seek to know about the relationship between Terraform Labs and Chai Corporation.
- The regulator will respect documents from the firm related to the Chai Corporation.
- The two co-founders of Terraform Labs, Do Kwon and Shin, did not show any objection to the SEC’s requests.
The United States Securities and Exchange Commission (SEC) is set to question Daniel Shin, the co-founder of Terraform Labs, in South Korea. The collapse of the Terra ecosystem triggered a domino effect in the crypto sector, resulting in the fall of some of the largest crypto firms like Celsius Network, Three Arrows Capital, and others.
According to a motion filed on July 10 by the SEC and granted on August 16 by District Judge Jed Rakoff, the regulatory agency seeks to question the Terra co-founder and will request crucial documents from the Seoul-based payments provider Chai Corporation that Shin also created.
The SEC aims to gain knowledge of the role Shin played at the Chat Corporation as per the July 10 motion and how it integrated the Terra ecosystem. Overall, the regulator seeks to know what the relationship was between Terraform Labs and the Chai Corporation. Interestingly, the two firms were reported to have been working closely.
However, Chai separated from Terraform Labs, and the SEC wants to know why the firm did so. Chai was founded by Do Kwon and Daniel Shin in mid-2019 and shared offices and staff with Terraform until the two firms split in 2020. While the two co-founders did not raise a dispute regarding the demands made by the regulator, they presented their own questions and document requests.
Recently, the SEC filed a lawsuit against Terraform Labs and Do Kwon, claiming that the cryptocurrencies TerraClassicUSD (USTC) and Terra Luna Classic (LUNC), formerly Terra (LUNA) and TerraUSD (UST), were fraudulent. The regulator also claimed that the firm falsely claimed that Chai used the Terra blockchain to process and settle transactions.
Recently, the interim CEO of Terraform Labs, Chris Amani, said that there is a very ‘big hill’ in his path to progress and rejuvenate the blockchain project. Any development activity is severely affected by allegations and lawsuits brought by regulators against Do Kwon. “Every time we would make a little progress, there would be some accusation or something that would derail us,” he said.
As reported earlier by Bitnation, the SEC has been granted the approval to appeal the decision made by Judge Analisa Torres in the XRP lawsuit, and as a result, the price of Bitcoin (BTC) has fallen severely.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
