Court: "Difficult to See Risk of Evidence Destruction or Flight"
Shin Hyun-sung, the Chief Executive Officer of Chai Corporation, who is accused of violating the Capital Markets Act in connection with the Terra·Luna crash incident, appeared at the Seoul Southern District Court at 10:17 a.m. on the 2nd for a warrant hearing. Photo by Yoo Byung-don tamond@
[Asia Economy Reporter Yoo Byung-don] Shin Hyun-sung, the Chief Executive Officer of Chai Corporation, who is accused of violating the Capital Markets Act and other charges related to the Terra and Luna crash incident, has avoided detention.
At around 2:20 a.m. on the 3rd, Judge Hong Young-pyo, in charge of warrants at the Seoul Southern District Court, dismissed the prosecution's request for detention of Shin and seven other Terraform Labs officials, who are accused of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud and breach of trust) and the Capital Markets Act, stating, "Considering their attitude during the investigation, the circumstances and process of their statements, and the content, it is difficult to see a risk of evidence destruction or flight beyond the scope of legitimate defense."
Judge Hong conducted the pre-arrest detention hearing (warrant substantive examination) for Shin and others from 10:30 a.m. the previous day.
Shin, who arrived at the court at around 10:17 a.m. that day, did not respond to reporters' questions about whether he admitted the charges or had anything to say to the victims and entered the court silently.
Earlier, the Seoul Southern District Prosecutors' Office Joint Investigation Team on Financial Securities Crimes (led by Dan Sung-han) and the Financial Investigation Division 2 (Chief Prosecutor Chae Hee-man) filed detention warrants for Shin and seven others on the 30th of last month.
Among them, four, including Shin, were early investors in Terra and Luna, while the other four were known to be key personnel in the technology development of Terra and Luna.
Shin co-founded Terraform Labs with CEO Kwon Do-hyung. The prosecution believes that Kwon, Shin, and others ignored internal warnings about the risk of simultaneous crashes of Terra and Luna and proceeded with issuance.
They also judged that Terraform Labs used funds to buy Terra and Luna and inflated trading volumes to lure ordinary investors. The prosecution estimates that the profits gained by the eight related parties, including Shin, range from a minimum of 1 billion KRW to a maximum of 80 billion KRW, with Shin reportedly earning profits in the 140 billion KRW range.
Additionally, Shin is accused of leaking customer information held by Chai Corporation to separate entities such as Terraform Labs.
In response, Shin's side maintains that he has not been involved in Terraform Labs' management since 2020 and that he merely steadily liquidated his remaining holdings, denying that he earned 140 billion KRW in profits.
Furthermore, Shin's legal counsel argued, "It is difficult to accept the criminalization of attempts to lower payment fees by utilizing innovative blockchain technology while fully complying with all obligations as an electronic financial business operator, after thorough review by a reputable large law firm."
They added, "We actually implemented a plan to provide benefits to customers and merchants by purchasing KRT (seigniorage) corresponding to the increase in Chai payment amounts using blockchain technology, and we explained the specific method as is to external parties such as investors."
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