South Korean won currency with the words bank of korea focused and physical bitcoin

South Korean authorities freeze over $104M belonging to Terra co-founder

Law enforcement agencies in South Korea are leaving no stone unturned in bringing justice to the victims of Terra’s collapse, and the latest move is the freezing of over $100 million belonging to the project’s co-founder, Shin Hyun-seung.

The seizure of the assets rests on the claim that Shin breached the South Korean capital markets law regarding full disclosure to investors. Prosecutors allege that the project’s co-founder held a cache of Luna tokens and sold them for an insanely high profit without disclosing the move to investors.

Fund seizure is a method employed by law enforcement to prevent bad actors from disposing of funds obtained from an illegal activity which could prevent the victims from recovering their funds. Shin has repeatedly claimed innocence of all the charges levied against him, but prosecutors are digging deep into the early days of Terra to find traces of financial impropriety.

“Reports that CEO Shin Hyun-seung sold Luna at a high point and realized profits through other illegal methods are not true,” said Shin’s attorney.

The asset’s seizure comes on the heels of a police raid on the office of Shin’s new business last week on the grounds that it misused customers’ information without their consent. Shin says he has severed all ties with Terraform Labs since 2020 and has gone on to start a payments firm called Chai Corp, but prosecutors are finding pieces of evidence of a collaboration between both entities.

In August, law enforcement agencies raided Shin’s apartment in search of evidence of his involvement in Terra’s collapse. Things reached a climax after the country’s parliament invited him to testify in person on the events leading to the ill-fated collapse, but Shin declined because his appearance would conflict with the ongoing police investigation.

South Korean authorities are slamming new charges on Terra’s founder

While the project’s founder is grappling with several lawsuits, prosecutors have issued fresh charges against him. This time, the charges hinge on allegations that Do Kwon used his role to manipulate the token prices in violation of the country’s laws.

Terraform Labs have continued to deny the allegations, saying prosecutors are interpreting the laws to bring frivolous charges against the firm’s principal members.

“It’s highly disappointing to see the Korean prosecutors continue to try to contort the Capital Markets Act to fit their agenda and push baseless claims,” said a company spokesperson.

The company argues that a litany of judicial reports show that virtual currencies are not considered investment contract securities. Since the start of the cases, Do Kwon has failed to make an appearance in court, leading to the launch of a global manhunt for his capture.

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