A South Korean court on Thursday dismissed for the second time a request by prosecutors for an arrest warrant for Terraform Labs co-founder Shin Hyun-seung, or Daniel Shin, repeating that the court didn’t regard him a flight risk or likely to tamper with evidence regarding the investigation into the collapse of the Terra-Luna cryptocurrency and stablecoin last year. Prosecutors accuse Shin of fraud. The court denied an arrest warrant for Shin in December.
Shin founded Terraform Labs in 2018 with Kwon Do-hyung – known as Do Kwon – who is now under arrest in Montenegro on charges of using fake travel documents.
Both men, South Korean nationals, are accused by prosecutors of fraud, breach of trust and violation of the capital markets law following the collapse of Terra-Luna, which was valued at US$40 billion at one stage and caused losses to hundreds of thousands of investors.
Shin has rejected the accusations, claiming he cut ties with Kwon and Terraform in 2020, or well before the company imploded.
Judge Yoo Hwan-woo of the Seoul Southern District Court said some of the charges against Shin leave room for debate. The prosecutors said in a text message to Forkast they do not have any plans to make a third request to arrest Shin.
South Korean prosecutors are attempting to extradite Kwon from Montenegro.
Kwon left his home in Singapore late last year after Interpol issued a “red notice’’ for his apprehension at the request of South Korea. Kwon has denied all the charges against him. Terraform Labs has stated that South Korea’s investigation of Terra-Luna has become politicized and claims the accusations are baseless.