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.

Fast facts

  • 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.