Jesse Coghlan8 hours agoSEC seeks to question Terraform Labs co-founder Daniel Shin in KoreaThe Securities and Exchange Commission wants to question Daniel Shin on Do Kwon and Chai Corporation’s relationship with Terraform Labs.18155 Total views82 Total sharesListen to article 0:00NewsJoin us on social networksThe United States Securities and Exchange Commission has been granted a motion to seek assistance from South Korea to question Terraform Labs co-founder Daniel Shin as it builds a case against the firm and its co-founder, Do Kwon. 

On Aug. 16, District Judge Jed Rakoff granted the SEC’s July 10 motion asking if it could seek to question the Terra co-founder, along with requesting documents from the Seoul-based payments provider Chai Corporation he founded.

In its July filing the SEC said it wishes to question Shin on Kwon’s role at Chai, how Chai used the Terra blockchain and Chai’s disclosures about its relationship with Terraform.

It also wants to know why Chai separated from Terraform. Chai was founded by Shin and Kwon in mid-2019 and shared offices and staff with Terraform until the two firms split in 2020.Excerpt of some of the questions the SEC seeks to ask Shin. Source: CourtListener

Terraform Labs and Kwon didn’t oppose the SEC’s motion and included their own questions and document requests. They have previously denied the SEC’s allegations.

The SEC sued Terraform and Kwon in February, alleging its now-collapsed cryptocurrencies TerraClassicUSD (USTC) and Terra Luna Classic (LUNC) — formerly Terra (LUNA) and TerraUSD (UST) — were fraudulent.

It also alleged Kwon and Terraform falsely touted that Chai used the Terra blockchain to process and settle transactions.

The SEC claimed Terraform and Kwon faked transactions of its Korean won pegged stablecoin TerraKRW (KRT) to give the impression that Chai was using the blockchain.

Related:Judge signs order allowing Terraform Labs to subpoena FTX

Terra’s interconnected crypto ecosystem collapsed in May 2022 wiping out around $40 billion in value, bringing the rest of the crypto market with it.

In April, South Korean prosecutors hit Shin with multiple fraud charges alleging he hid the risks of investing in Terraform’s cryptocurrencies.

Kwon is currently in Montenegro serving a four-month prison stint for trying to leave the country using a fake Costa Rican passport.

Along with the SEC’s suit, Kwon also faces criminal charges in the U.S. and South Korea. Both countries have requested his extradition.

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