US SEC Gets Permission to Work with South Korea in Terraform Labs Probe, Including Questioning Co-Founder.
A US judge has allowed the Securities and Exchange Commission (SEC) to work with the South Korean government in investigating a case involving Terraform Labs co-founder Daniel Shin and Chai Corp, a payments company.
Spotlight Shifts to Co-Founder Daniel Shin:
The SEC is gathering evidence from Daniel Shin and documents from Chai Corp as part of their efforts to strengthen their case against Terraform Labs and former CEO Do Kwon. The lawsuit claims a scheme led to a loss of over $40 billion in crypto value. The SEC’s approach is supported by a 1970 treaty for international evidence collection.
Do Kwon is facing legal troubles in the US and South Korea, as well as the SEC’s complaint. Both Kwon and Terraform didn’t oppose the SEC’s request for evidence, and they’re presenting their own evidence for their defense.
Although Terraform Labs denies wrongdoing, co-founder Daniel Shin faced charges in April by South Korean prosecutors. Despite this, Shin’s lawyer asserts he wasn’t involved in Terra’s downfall. Terraform Labs and Chai Corp, co-founded by Kwon and Shin, had a complex relationship. They separated in 2020, with Kwon leading Terraform and Shin overseeing Chai.
The SEC’s lawsuit alleges that Kwon falsely claimed Chai used Terraform’s blockchain and TerraKRW stablecoin for transactions. The lawsuit states that Kwon and Terraform fabricated blockchain transactions to appear as if they were using their technology. The SEC’s investigation includes seeking testimony and documents related to Chai’s payment processing, adoption of Terraform’s tech, communication between the companies, and disclosures to Chai’s investors about their association.
Prosecutors Cite US Court Decision Regarding XRP:
In South Korea, prosecutors are using a decision about XRP from a US court in a case against Terraform Labs executives connected to the Terra ecosystem’s downfall. This shows how cryptocurrency legal matters have a global impact. Additionally, CEO Do Kwon is trying to dismiss the US SEC’s complaint using Judge Torres’ decision in the XRP case.
The Seoul Southern District Prosecutor’s Office has obtained a translated version of the XRP judgment to use in the Terraform Labs case.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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