Prosecutors Request Arrest Warrant for Shin Hyun-sung in 'Terra and Luna Crash Incident'

Former Chief Executive Officer of Chai Corporation, Shin Hyun-sung.

[Asia Economy Reporter Choi Seok-jin] The prosecution investigating the Terra·Luna crash incident filed an arrest warrant on the 29th for Shin Hyun-sung (37), former CEO of Chai Corporation and co-founder of Terraform Labs alongside CEO Kwon Do-hyung.

The Seoul Southern District Prosecutors' Office Joint Investigation Team on Financial and Securities Crimes (Chief Dan Sung-han) and the Financial Investigation Division 2 (Chief Prosecutor Chae Hee-man) filed arrest warrants on the same day for eight individuals, including Shin, on charges of fraud and breach of trust under the Act on the Aggravated Punishment of Specific Economic Crimes, violations of the Capital Markets Act, and violations of the Act on the Regulation of Conducting Fund-Raising Business Without Permission.

Among the eight individuals for whom arrest warrants were filed, four, including Shin, are known to be early investors in Terra·Luna, while the remaining four are key personnel involved in the technical development of Terra·Luna.

Shin, who founded the social commerce platform TMON in 2010, is accused of holding the cryptocurrency Luna issued before starting his business and selling it during a price surge, earning a capital gain of 140 billion KRW.

The prosecution considers cryptocurrencies including Luna to have securities characteristics and applied charges related to fraudulent and unfair trading under the Capital Markets Act against Shin.

In addition, Shin faces charges of leaking customer information held by Chai Corporation to separate entities such as Terraform Labs, violating the Electronic Financial Transactions Act.

The prosecution summoned Shin three times as a suspect starting from the 17th and conducted intensive investigations.

Victims of the Terra·Luna incident had requested the prosecution to investigate Shin along with CEO Kwon, who is currently staying overseas to avoid the investigation.

However, with CEO Kwon, the key figure in this incident, remaining abroad and not cooperating with the prosecution, there is analysis that the prosecution had no choice but to secure Shin’s custody first.

CEO Kwon dissolved the Korean corporation in April 2021 and left for Singapore, selling Terra worth approximately 2 billion USD on May 9. Despite stating his willingness to cooperate with the prosecution, he has not returned to Korea.

Ultimately, the prosecution obtained an arrest warrant on September 14 and requested Interpol to issue a red notice, but CEO Kwon, who was staying in Singapore, is reported to have traveled to a third country via Dubai, United Arab Emirates (UAE).

Meanwhile, Shin stated, "I resigned two years before the Terra·Luna crash incident and am not related to the crash. I voluntarily returned during the incident and have been cooperating fully with the investigation to uncover the truth, so I strongly regret the prosecution’s decision to file an arrest warrant."

He added, "I will faithfully explain many parts that the prosecution misunderstands in court."