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Home MEDIA

SEC Granted Permission to Question Terraform Labs Co-founder, Daniel Shin

BlockNews Team by BlockNews Team
August 22, 2023
in MEDIA, POLITICS, SOCIAL
Reading Time: 3 mins read
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  • Terraform gives positive feedback to SEC requests for its documents.
  • Court accepts SEC motion to question Terraform Co-founder and look into his corporation.
  • Daniel Shin is to be questioned by South Korean authorities on behalf of the Securities and Exchange Commission.

The SEC motion to question the co-founder of Terraform Labs, Daniel Shin, has been granted. The organization now has the assistance of South Korean authorities to question Shin as they continue to build a case against Terraform Labs and its co-founder, Do Kwon.

The motion was granted on August 16 by District Judge Jed Rakoff. The request from the SEC was to seek permission to question Daniel Shin, alongside requesting documents from the Seoul-based payments provider founded by Daniel Shin, Chai Corporation.

In a filing by the SEC in July, the organization requested the chance to question Daniel Shin on Kwon’s role at his corporation, Chai, the company’s use of the Terra blockchain, and the company’s documents about their relationship with Terraform.

The SEC is also requesting to know why Chai Corporations was separated from Terraforms, as the company was founded by both Do Kwon and Daniel Shin in 2019 and had a shared office space and staff with Terraforms Labs up until they both split in 2020.

The SEC’s motion received a positive response from both Terraform Labs and Do Kwon while also including their own questions and document questions, which is in contrast to their previous answers, which had been denying the SEC’s allegations.

The SEC had previously sued Do Kwon and Terraform labs back in February, the allegations were that its collapsed cryptocurrencies, TerraUSD (UST), Terra Luna Classic (LUNC), formerly known as Terra (LUNA), and TerraClassicUSD (USTC), were fraudulent tokens.

Another allegation laid against Kwon and Terraform by the SEC was that the company and the cofounder falsely claimed that Chai Corporation used the Terra blockchain in processing and settling transactions.

The Securities and Exchange Commission claimed Terraform and Kwon were guilty of faking transactions of its Korean won pegged stablecoin, TerraKRW (KRT), to help further spread the assumption that Chai was, in fact, working with Terraform.

The Terra interconnected ecosystem ended in May 2022, taking out around $40 billion in value and bringing down the rest of the crypto market with it as it started seeing a massive recession.

In April of this year, Daniel Shin was hit with multiple fraud charges by prosecutors after alleging that he hid the possibility of risk in investing in Terra coins from the company’s investors.

Conclusion

Do Kwon is held down in Montenegro on a four-month prison term for trying to escape the country using a fake Costa Rican passport. Alongside the suits laid against him by the SEC, Do Kwon is also facing criminal charges in South Korea and the United States, with both countries requesting his extradition.

It has not been decided what country Do Kwon will be extradited to, as he is still completing his prison term in Montenegro.

Disclaimer: BlockNews provides independent reporting on crypto, blockchain, and digital finance. All content is for informational purposes only and does not constitute financial advice. Readers should do their own research before making investment decisions. Some articles may use AI tools to assist in drafting, but every piece is reviewed and edited by our editorial team of experienced crypto writers and analysts before publication.
Tags: Daniel ShinsecTerraform Labs
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