A tribunal in South Korea has again declined to issue a warrant for the detention of Daniel Shin, a co-founder of Terraform Labs being investigated for alleged fraud.
Seoul Court Refuses Arrest of Terraform Co-Founder Citing Low Flight Risk
The Seoul Southern District Court has declined a request by the Prosecutor’s Office for the pre-trial detention of Shin Hyun-seung, a co-founder of the failed blockchain firm Terraform Labs also known as Daniel Shin. He is believed to have played a key role in the collapse of the company’s cryptocurrencies, luna and the stablecoin terrausd.
On Thursday, the court again refused to issue an arrest warrant for Shin, determining that he is unlikely to flee or tamper with evidence, the Yonhap news agency reported. The crypto entrepreneur is under investigation for illegal profits made before the coins crashed last year.
Prosecutors first asked for an arrest warrant against Shin in November which was denied by the court. They made the request again after Do Kwon (Kwon Do-Hyung), another of Terraform’s founders, was arrested last week.

Kwon was detained in Montenegro while attempting to board a flight for Dubai. South Korean officials are seeking his extradition which is likely to take time. According to his Montenegrin counsel and the country’s justice minister, he is first going to stand trial in the Balkan nation for possession of a false Costa Rican passport.
In South Korea, Daniel Shin faces multiple charges of fraud and violations of the laws governing capital markets, financial transactions and information. He is suspected of storing pre-issued luna, gaining 140 billion won (almost $108 million) by selling the tokens at a high price point, and failing to inform investors about the risk of the two cryptocurrencies collapsing.
Shin is also allegedly responsible for using customer information and funds of a fintech firm he headed, Chai Corp., to promote luna. He has denied all these charges, claiming that he was not connected to Terraform Labs after leaving the company in March 2020, when he founded Chai Corporation.
According to a report by the KBS, the national broadcaster of South Korea, the Seoul court acknowledged that the accusations had been largely verified but pointed out that the risk of destroying evidence had been reduced with the arrest of Kwon. It also highlighted the need to allow Shin to exercise his right to defend himself.
Montenegro’s Interior Minister Filip Adžić revealed this week that investigators found three laptops and five cellphones belonging to Kwon containing a lot of “very interesting” information. During a press conference with Montenegrin Justice Minister Marko Kovač in Podgorica, officials announced that South Korea and the U.S., which also wants Kwon’s extradition, have both asked for the devices.
What do you think about the South Korean court’s decision to refuse the arrest warrant for Terraform’s co-founder Daniel Shin? Share your thoughts on the case in the comments section below.