Terraform Labs Co-Founder At Risk Of Arrest Amidst $60 Billion Crypto Wipeout

Key Points:

• South Korean prosecutors are renewing their efforts to arrest Daniel Shin, a co-founder of the Terraform Labs crypto project.
• Shin’s lawyers said he split from Terraform Labs in 2020 and has not been involved in its operations since.

South Korean prosecutors have recently made a fresh effort to arrest Daniel Shin, a financial technology entrepreneur who played a significant role in co-founding the Terraform Labs crypto project, as per Bloomberg.

This move comes after the recent arrest of Do Kwon, the other founder of Terraform Labs, while he was in Montenegro. Both South Korea and the US are currently seeking Kwon’s extradition to face charges related to the implosion of TerraUSD and its sister token Luna in May 2022. This event sparked a wave of crises in the crypto market, which exacerbated the $2 trillion rout in digital-asset prices.

Shin’s lawyers have previously indicated that he split from Terraform Labs in 2020 and has not been involved in its operations since. Despite this, prosecutors in Seoul are renewing their efforts to detain Shin. In December, a South Korean court rejected an earlier effort by prosecutors to obtain an arrest warrant for Shin, citing that it was difficult to believe he posed a flight risk or would destroy evidence. However, prosecutors in Seoul indicated last year that Shin faced charges, including fraud, breach of duty, violation of capital-markets law, and illegal fund-raising.

Stablecoins like TerraUSD are designed to hold a constant value, typically around $1. However, the token’s failure was the most spectacular ever seen in the stablecoin segment. The implosion of TerraUSD and Luna led to a significant loss for investors, which raised concerns over the stability of the crypto market.

The recent developments in the Terraform Labs case have drawn significant attention from the crypto community and regulators and law enforcement agencies. The collapse of TerraUSD and Luna has sparked a renewed focus on the regulation of the crypto market. The instability of the market has also raised concerns over the use of stablecoins and their role in the broader financial system.

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