Seoul court rejects warrants for former Terraform Labs employees and investors over Luna collapse 

Seoul court rejects warrants for former Terraform Labs employees and investors over Luna collapse 

A Seoul court denied prosecutors’ request for warrants to detain eight persons related to Terraform Labs. This included Daniel Shin, the co-founder of Terraform Labs and early investors as well as former engineers.

It’s difficult to believe they would flee or destroy evidence as Shin and the seven other suspects have been cooperating with the investigation, Yonhap News said, citing the Seoul court. In addition, the suspects also need to be guaranteed their rights to defend themselves against the allegations of capital market rules, which is the core accusation of this case, according to the court, per Yonhap.

The Seoul Southern District Prosecutors Office told TechCrunch it was difficult to understand this conclusion, as the court is aware of the seriousness and financial implications of the allegation. The court dismissed the warrants and said that the eight defendants must have the right to defend themselves against allegations.

Shin is being charged with taking illegal profits worth about $105 million by selling Luna tokens when it was near its all-time high without disclosing this move to investors. It took place before the Luna and TerraUSD collapsed earlier this year, which was in violation of the Capital Market Act. Prosecutors also believe Shin used customer data from Chai, a separate fintech startup, to promote Luna, violating Electric Financial Transaction Act. Similar charges were also brought against the seven other Terraform participants.

Shin denied claims of trading Luna at a high market price and violating customers’ data. Terraform was founded in Singapore in 2018 by Do Kwon and Shin. Shin left Terraform in March 2020 to found Chai and stepped down as CEO of Chai earlier this year.

South Korean prosecutors began the investigation after the crash of the UST-Luna token earlier this year, which wiped out $40 billion in market value. In September, South Korea issued an arrest warrant for another co-founder, Kwon, whose whereabouts are currently unknown, and requested Interpol, the international law enforcement agency, to issue a red notice for Kwon.

” The Dec 3rd ruling by the Seoul Southern District Court to reject South Korean prosecutor’s detention warrant requests for former Terraform Labs workers once again illustrates how unfounded the prosecutor’s claims,” a Terraform Labs spokesperson stated in an emailed statement sent to TechCrunch. “With these allegations behind, our focus is now on building the future Terra and developing the best Web3 ecosystem to launch and scale a Blockchain .

Updates with Terraform Labs spokesperson comment.

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