Shin Hyun-seong, co-founder of Terra and Luna, is facing a second arrest warrant in connection to the market crash investigation. Shin, the former CEO of Chai Corporation, is accused of fraudulent trading and conspiracy to violate regulations under the Capital Market Act.
The Financial and Securities Crimes Joint Investigation Team (JIT) requested the arrest of Shin and seven others, including four initial investors and four key employees of Terra and Luna’s technology development team, in November of last year. However, the court denied all requests, citing that “it is difficult to see a risk of concealing evidence or fleeing beyond the scope of exercising the right to a fair defense, considering the attitude, statement process, and content of the investigation.”
Shin is accused of ignoring internal warnings about the risk of a simultaneous crash of Terra and Luna and proceeding with the issuance of tokens. He is also accused of luring retail investors to buy Luna before the start of the business and then making a profit of 140 billion won by selling them. Additionally, he is accused of leaking customer information held by Chai Corporation to Terraform Labs and other separate entities.
The prosecution, which considers Luna a “security” under the Capital Market Act, is focusing on securing evidence against Shin. As a key accomplice of Kwon Do-hyung, also a co-founder of Terraform Labs, the arrest of Shin would strengthen the case to bring Kwon back to Korea.
During the pre-trial examination, Shin briefly answered a reporter’s question about whether he had anything to say to the victims of the Terra and Luna market crash. He replied, “I will let you know later,” and then headed to the courtroom. When asked about other allegations, Shin remained silent.
The decision on Shin’s arrest is expected to be announced later in the day, and this latest development highlights the ongoing investigation into the market crash and the individuals involved in it. As the investigation continues, the public and investors are eagerly awaiting the outcome and any measures taken to prevent similar incidents from happening in the future.
