SoKor’s Authorities Raid Terraform Labs Co-Founder’s Company
- South Korea’s Seoul Southern District Prosecutors’ Office confirmed that authorities have raided Chai Corporation, a payments firm founded by the co-founder of the Terraform Labs, Daniel Shin, or Shin Hyun-seung.
- Shin has been summoned so that it is earlier to investigate his involvement in the breach of duty and violations of the capital markets law for unfair trade practices.
- Prosecutors allege that Chai Corporation used personal information of its customers without consent in order to form Chai’s Terra payment services while Shin is accused of storing Luna tokens prior to issuance.
South Korean authorities are looking to punish Do Kwon, the founder of Terraform Labs, the firm behind the failed cryptocurrency LUNA (now LUNC) and the stablecoin Terra (now USTC), which lost its peg following a bank run. The authorities have raided Chai Corporation, a payments firm operating in the region that was founded by the co-founder of the Terra ecosystem, Daniel Shin, or Shin Hyun-seung.
The authorities raided Shin’s firm on Tuesday as per South Korea’s Seoul Southern District Prosecutors’ Office. More importantly, the authorities are alleging that Chai Corporation used personal information of its customers without consent in order to form Chai’s Terra payment services. This is a crime and as a result, attracted attention of the local authorities which are already investigating Do Kwon’s role in the collapse of the Terra ecosystem.
“Chai has been operating independently from Terra since Q1 2020, when our marketing partnership was suspended. Since then, it has an independent team and with independent operating governance,” a Chai spokesperson told Forkast. “Daniel will fully cooperate with the ongoing investigation to clarify the misunderstandings and to resolve such speculations.”
It is also crucial to note that the relationship between Chai and Terraform Labs dates back to 2019 when the former partnered with the latter to integrate the Korean won-pegged stablecoin, KRT, into Chai’s payment platform, a move which was not mainstream during that period when stablecoins’ popularity was still climbing new heights.
According to the prosectors involved in the case, Terraform Labs co-founder Shin has been summoned so that it is earlier to investigate his involvement in the breach of duty and violations of the capital markets law for unfair trade practices. In the latter charge, prosecutors allege that Shin allegedly stored Luna tokens. These tokens had already been pre-issued and the investors were not informed of the same. The tokens stored were then sold for an extremely high price and as a result, Shin earned 140 billion Korean won, or about $106 million.
The collapse of the Terra ecosystem which was under Terraform Labs was the spark that ignited the current bearish flame in the crypto and wiped out billions in the past few months. Interestingly, South Korean authorities are still looking into the matter and recently, their investigations reached Europe, the potential hideout of Do Kwon, the orchestrator of the Terra ecosystem.
While Kwon is yet to present himself in front of the media and the prosecutors, he has maintained a relatively stronger online presence. He recently said that a conference/meet-up will be organized wherein authorities from around the world can listen to what the co-founder of Terraform Labs has to say.