South Korea’s Southern District Prosecutors raided Terraform Labs co-founder Daniel Shin’s home to investigate possible illegal activities.
The raid occurred on Wednesday, July 20, 2022, and included Shin’s Chai Corporation payment firm. Chai Corp. processes over $6 billion for over 2200 Asian merchants. Police also raided two other firms with connections to Terraform Labs, according to a spokesperson from the prosecutor’s office.
Kwon under intense investigation
The raid of Shin’s home was preceded by the raid of seven exchanges in South Korea, namely Bithumb, Upbit, Coinone, and four others, after 81 investors filed complaints in May 2022.
Five disgruntled investors baying for Kwon and Shin’s blood filed criminal complaints against the duo on May 19, 2022, followed by an additional 76 on May 27, citing cumulative damages of over $6 million. The investors accused Kwon and Shin of fraud and related financial crimes. These charges came 2-3 weeks after the collapse of the TerraUSD stablecoin due to the failure of an arbitrage mechanism designed to keep the coin at its $1 peg.
Investigators hope to scrutinize material from the raids before interrogating witnesses to determine whether Kwon orchestrated the collapse of TerraUSD. In June 2022, Korean prosecutors imposed a flight ban on employees of Terraform Labs until investigations were completed.
Shin told the Financial Times on June 9, 2022, that he and Kwon had no fraudulent intentions, nor were they aware of…
