Terraform Labs Co-Founder Daniel Shin has recently been the main focus of several investigations by South Korean authorities in relation to the alleged collapse of the Terra-Luna cryptocurrency and stablecoin which occurred late last year.

Prosecutors had applied to the South Korean court for the issuance of a second arrest warrant against Shin, citing suspicions of fraud and accusations that he had acted as the main force behind the collapse of the token. However, the court again rejected the request in a second hearing on April 8.

The court reaffirmed their initial decision that there was insufficient evidence to justify Shin's arrest, given the lack of risk of him fleeing the country or engaging in evidence tampering.

In December 2020, the Korean judiciary rejected the initial request for an arrest warrant for Shin. The initial rationale for behind the decision was that Shin was unlikely to escape the country, tamper with evidence, or act in contempt of court due to his status as the co-founder and CEO of Terraform Labs.

Furthermore, the court noted that the instability of the crypto markets, and no real indication that Shin acted intentionally to defraud his clients, were factors which weighed against the issuance of an arrest warrant.

The newly released court documents further alluded to the widespread nature of the crypto markets in 2020, as well as other business dealings related to Terraform Labs which were conducted in other countries. Acknowledging these factors, the court held that charging Shin with fraud could not be done on an almighty basis alone.

In light of the developments, the court has once again declined to issue an arrest warrant for Shin, determined that the Korean prosecution department had failed to provide any new evidence or arguments which necessitated his arrest.

The dismissal of both arrest warrants for Shin is likely to be seen as a sign of further increased government and judicial scrutiny of the South Korean crypto markets, as well as a tacit acknowledgment of the increasingly widespread and decentralized nature of the crypto industry, particularly in 2020.

Recent weeks have seen a number of South Korean crypto companies and exchanges the target of major legal action, but the dismissal of the arrest warrant for Daniel Shin is a reminder of the importance of proper evidence in any investigation into the collapse of a crypto asset. The seriousness of such probes will be a key element as South Korea continues to evaluate the legality of the industry.



Other News from Today