South Korean judge revokes warrant for Terra co-founder Shin Hyun-seong’s arrest

South Korea

TL;DR Breakdown

  • South Korean judge throws out arrest warrant for Terra founder Do Kwon. 
  • South Korean prosecutors accuse Do Kwon of manipulating Terra price. 

A South Korean court presided by Judge Hong Jin-Pyo has dismissed cases affecting the Terra ecosystem. In October, the chief executive of Terraform Labs, Yoo Mo, was detained by law enforcement. But after 48 hours, Judge Hong similarly invalidated the warrant.

The judge stated that it was challenging to determine the “necessity and significance” of the arrest. A local news outlet quoted Hong Jin-Pyo, the senior judge overseeing warrants at the Seoul Southern District Court, as saying:

It is challenging to see how there is a risk of destroying evidence or escaping beyond the scope of exercising the right to a legal defense when considering the attitude toward the investigation, the circumstances, the process, and the contents of the statement.

South Korea sued Terra co-founder Do Kwon

Terra co-founder Do Kwon, who is sued in South Korea for his role in the company’s failure, is doubtful to come back. After Terra was destroyed, there were unsubstantiated reports about Do Kwon’s whereabouts.

Prosecutors claim that Shin concealed pre-issued Luna from investors and afterward sold them at a premium price in their request for a warrant. He is also suspected of taking $105 million in illegal token sale proceeds, which is around 140 billion won.

Shin is charged with breaking the Electronic Financial Transactions Act. Official investigations claim that he obtained user data and financial resources from the fintech firm Chai Corp and utilized them to push Luna.

The court decided not to issue arrest warrants for individuals who had made excessive gains despite acknowledging the seriousness of the accusations and claiming to be safeguarding the defendant’s right to a defense. The court’s decision has been met with a level of surprise and bafflement, with the prosecutor’s office texting in after the verdict. Loss-making crypto investors had the same sentiment.

In a text message, Shin’s counsel referred to the court’s decision as “good judgment.” The impact of the release on the Terra lawsuit and the investors who suffered losses is currently unknown. A new arrest warrant may be issued once prosecutors evaluate the dismissal.

South Korean prosecutors accuse Do Kwon of manipulating Terra’s price

According to a local report from South Korea, the country’s prosecutors have evidence that suggests Do Kwon, a co-founder of Terraform Labs, once gave instructions to an employee to influence the price of Luna Classic (LUNC).

According to a report by Korean Broadcasting System (KBS), a prosecutor’s office representative from South Korea claimed they had gotten a “conversation history” in which “CEO Kwon directly ordered price manipulation.”

A “messenger discussion” between Kwon and a former Terraform Labs employee was reportedly used as the basis for the purported proof. The prosecution withheld additional information, stating:

CEO Kwon clearly ordered price manipulation, according to a discussion history that I need to disclose in detail.

The price action of Terra’s LUNC, formerly Terra, during the last bull market, was without a question one of the most outstanding across all cryptocurrencies, even though the precise specifics of the price manipulation are still unknown.

According to CoinGecko data, its price increased by almost 2,800% from $4.18 in late May 2021 to an all-time high of $119.18 on April 5, 2022, before experiencing a catastrophic crash on April 30.

However, the paper states that Kwon’s agent has persisted in refuting these accusations.

Kelda Kageni

Kelda Kageni

As a writer with a strong background in both cryptocurrency and blockchain technology, Kelda has a unique understanding of these rapidly evolving crypto industries. Writing for both technical and non-technical audiences, she contributes informative and engaging content for websites, whitepapers, and thought leadership pieces. Her current passions are observing industry news and developments and consistently producing timely, relevant content.

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