South Korean prosecutors said they might charge Terraform Labs. cofounder Daniel Shin with fraud for promoting the now-collapsed Terra-Luna stablecoin as a payment method despite multiple warnings from financial regulators that it was against the law.
According to reports by Forkast News Shin Hyun-seung repeatedly was promoting Terra Stablecoin as a payment method on E-commerce platforms for users in South Korea.
The Financial Supervisory Service warned Shin multiple times that Virtual assets cannot be registered as a payment method under Electronic Financial Transactions Act.
Shin co-founded Terraform Labs, which issued the Terra-Luna stablecoin, with Do Kwon, in 2018. Do Kwon was the chief executive officer of the company.
Choi Sung-kook in the Seoul Southern District Prosecutors’ Office confirmed the YTN report to Forkast, which included that the prosecutors are considering charges of fraud against Shin under the Capital Markets Act and whether to issue an arrest warrant.
South Korean authorities are investigating Terra-Luna, which collapsed in May this year and caused losses to hundreds of thousands of investors worldwide. While they have issued an arrest warrant and have Interpol’s help in tracking Do Kwon, the whereabouts of the Terra CEO are unknown.