According to the Korea Times, Shin is accused of selling a $105 million stockpile of Terra’s LUNA tokens at the top price of the cryptocurrency. The tokens were pre-issued, but normal investors didn’t know about it. Prosecutors contend that Terra’s LUNA cryptocurrency qualifies as a financial investment security, and they are asking the court to sanction Shin’s arrest on Friday or Saturday.
Shin asserted that despite having sold more than 70% of his LUNA holdings before the price increase, he still had a sizeable amount at the time of the cryptocurrency’s crash. The warrant also lists Terraform Labs engineers and seven additional early investors in addition to Shin. One of those arrested works for Kernel Labs, a company founded by former Terra developers, according to local news source JTBC.
Do Kwon, the CEO and co-founder of Terraform Labs, was the target of an Interpol red alert until South Korean authorities filed an arrest order for him in September. Kwon maintains that he is not on the run, despite this. His passport was revoked by South Korean authorities in October. A $57 million class-action lawsuit against the co-founder of Terra was filed in late October, adding to Do Kwon’s mounting legal troubles.
In May 2022, the Terra ecosystem collapsed, wiping away the money of investors by almost $40 billion in a matter of weeks. The collapse sent shockwaves through the cryptocurrency market, driving down the value of Bitcoin and other cryptocurrencies and ultimately forcing the bankruptcy of Celsius, Voyager, and BlockFi, as well as hedge fund Three Arrows Capital.
In addition, the now-bankrupt cryptocurrency exchange FTX was affected by the collapse of Terra as the crypto epidemic spread throughout the sector, according to blockchain analytics companies Nansen and Glassnode.
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