Prosecutors stormed Chai Corporation, the payments technology company founded by Daniel Shin, on the allegations that it misused its customers' personal information without their consent.
Investigators say Daniel Shin breaches South Korean capital market law over allegedly holding a stash of LUNA without disclosing it to investors.
The prosecutors say that the evidence was gleaned from a “messenger conversation” between Do Kwon and an ex-employee of Terraform Labs.
The claimants seek $57 million as damages for losses suffered during the de-pegging of TerraUSD (UST) from the U.S. dollar.
Investors who got rekt after investing in LUNA/UST are now taking it upon themselves to pursue Kwon, who says charges against him are politically motivated.
Yoo Mo was arrested last week on charges of violating the Capital Markets Act as a key member of the Terra group, but a South Korean court has dismissed his arrest.
South Korea's extensive probe into the LUNA and UST meltdown is gaining ground with the arrest of Do Kwon's key aide, Yoo Mo, who is being accused of fraud and inflating token prices using bots.
In a letter to South Korea's National Assembly, Daniel Shin said that local law enforcement agencies are investigating him for his role in Terra's collapse in May, and his testimony could be tainted.
Authorities in South Korea ordered KuCoin and OKX to freeze over 3,300 BTC they claim is owned by the Luna Foundation Guard, but Kwon claims he knows nothing about it.
South Korea says that Interpol has acted on its request to add the Terra founder to its Red Notice list as the walls continue to close in on the fugitive.
The bill has undergone several amendments, and the latest would protect Americans from a Terra-like collapse by banning "endogenously collateralized" tokens.