Terra·Luna incident Shin Hyun-seong, the former CEO of Chai refused a guarantee

Court “It is difficult to see that there is a risk of destroying evidence and escaping”
Prosecutors “Suspect thought of astronomical profiteering… it’s hard to accept the dismissal”

On the 3rd, the court rejected the arrest warrant for Shin Hyun-seong (37), the former CEO of Chai Corporation, who founded Terraform Labs, the issuer of virtual currency ‘Terra Luna’.

Hong Jin-pyo, chief judge in charge of warrants at Seoul’s Southern District Court, rejected the arrest warrants at 2:20 a.m. the same day after questioning the suspects before their arrest the day before, saying, “The nature of the crime is very serious, but it is difficult to see the need for arrest and significance.”

Shin is considered a key figure in the Terra and Luna crash that rocked the virtual currency market in May this year.

With Terraform Labs co-founder Kwon Do-hyung (31) staying abroad and not returning to Korea, even securing a new recruit for former CEO Shin has failed, leading to observations that the investigation will face difficulties.

Judge Hong said, “Considering the attitude of the suspect and other accomplices to the investigation, the circumstances, the process, and the content of the statement, it is believed that the suspect and the accomplices may destroy evidence in systematically and deliberately or escape beyond lawful scope. defense rights. It’s difficult,” he explained.

“It seems necessary to guarantee the right of the suspect to defend against the main charges in this case, whether or not the Capital Markets Act was breached, the scope of the offence, whether the accomplices general co-ordinates and manages functional activities, and the scope and role. of participation,” he said.

However, he added, “The objective factual relationship appears to be largely established by the evidence obtained so far.”

Arrest warrants for three early investors and four developers of Terra Luna, also requested together, were denied for the same reason.

On the 29th of last month, the joint financial crime and warrant investigation team of the South Seoul District Prosecutor’s Office (chief Dan Seong-han) and the second financial investigation division (chief prosecutor Chae Hee-man) requested arrest warrants for these eight people.

'Terra Luna Incident' Shin Hyun-seong rejects the guarantee for former CEO Chai (comprehensive)

CEO Shin and others are accused of issuing a stable coin (a virtual asset with a fixed price) Terra and sister coin Luna without informing investors even though the design itself, where the price is adjusted automatic according to algorithm, defective (aggravated penalty for certain economic crimes), fraud according to law), etc.

In particular, the prosecution focused its investigation on the fact that CEO Kwon and former CEO Shin went ahead with the announcement despite Terraform Labs’ internal opinion that Terra and Luna were in high danger of collapsing together.

Former CEO Shin is also accused of making an unfair profit of 140 billion earned by holding Luna issued before the start of the business and selling it when the price increased.

The prosecutors also estimated that the illegal earnings of the other seven persons ranged from a minimum of 1 billion won to a maximum of 80 billion won.

They are also accused of leaking customer information held by Chai Corporation to other companies such as Terraform Labs (violating the Electronic Financial Transactions Act).

Representative Kwon, who remains overseas, is in a state of unknown whereabouts despite an Interpol red alert and passport invalidation measures.

The prosecution plans to review the reason for the dismissal and decide whether to reapply for an arrest warrant for former CEO Shin and others.

Regarding the dismissal of the arrest warrant, the Southern District Prosecutor’s Office rebutted, saying, “It is difficult to understand that the warrant was denied in the name of guaranteeing the rights of defense of the suspects who took astronomical profits while recognizing the serious nature the crime is a serious multiple-injury case against ordinary investors.” he did.

An official from the Southern District Prosecutor’s Office said, “There are countless serious charges, but it is not convincing that they are being dismissed for violating the Capital Markets Act.”

The prosecution believed that Luna and other virtual currencies had the property of securities, and applied criminal charges specified in the Capital Markets Act, such as fraudulent and illegal transactions, to former CEO Shin and others.

As the arrest warrant is ruled out, it is expected to focus on establishing legal principles to support warrants.

'Terra Luna Incident' Shin Hyun-seong rejects the guarantee for former CEO Chai (comprehensive)

/happy news

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