Key points to remember
- South Korean authorities raided Chai Corporation, a Seoul-based company owned by Terra co-founder Daniel Shin.
- Chai is accused of sharing private and personal user data with Terra.
- Daniel Shin is the subject of several legal investigations and faces a litany of potential charges.
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South Korean authorities raided Chai Corporation, a Seoul-based company owned by Terra co-founder Daniel Shin.
Chai offices raided
South Korean law enforcement raided the offices of Chai Corporation, a payment technology company founded by the co-founder of Terra Daniel Shin. Prosecutors working for South Korea’s Seoul Southern District confirmed the raid on Tuesday.
The prosecution is said to be interested in launching the company’s Terra payment services, which may have involved misuse of customers’ personal and private data. This data breach dates back to 2018.
Chai’s partnership with developer Terra Terraform Labs has been confirmed in June 2019, when the company announced that it had integrated Terra’s won-pegged stablecoin into its payment app.
More recently, Shin and Chai have attempted to distance themselves from Terra after its spectacular collapse in May. “Chai has been operating independently from Terra since Q1 2020, when our marketing partnership was suspended,” a spokesperson said. Told Forkast following the raid.
Insider Trading Allegations at Terra
On Monday, local media reported that Shin was under major investigation by South Korean authorities.
The case hinges on a large number of pre-issued LUNA tokens, which Shin is accused of receiving without notifying regular investors. Shin then allegedly threw those tokens into the market, allegedly profiting from 140 billion Korean won worth $106 million.
Since authorities made the decision to treat LUNA as a financial investment security, Shin’s shares are being treated as a potential violation of local capital markets law.
Prosecutors are also reportedly seeking information on Shin’s knowledge of insider trading and price manipulation within Terra itself. These new accusations of impropriety only add to what is becoming a veritable storm of legal headaches for Shin and his firm.
Its co-founder, Do Kwon, faces even more serious consequences. The bombastic personality is currently wanted by the South Korean authorities and is on the list of red notices from Interpol, which advises the authorities of its 195 member states to arrest him on the spot. Kwon remains at large, although he has made a few media appearances and been active on Twitter.
While Shin may wish to distance himself from Terra’s catastrophe, he currently finds himself swimming against the powerful void effect of its aftermath.
Disclosure: At the time of writing, the author of this article owned BTC, ETH, and other cryptoassets.