SEC Seeks to Question Daniel Shin About Do Kwon and Chai Corporation’s Connection to Terraform Labs.
The US Securities and Exchange Commission (SEC) got approval to ask South Korea for help in talking to Daniel Shin, a co-founder of Terraform Labs. The SEC is making a case against Terraform Labs and its other co-founder, Do Kwon.
On August 16, District Judge Jed Rakoff said yes to the SEC’s request from July 10. They want to talk to Shin and get documents from Chai Corporation, a company he started in Seoul.
The SEC wants to ask Shin about Kwon’s role at Chai, how Chai used the Terra blockchain, and what Chai said about its connection with Terraform. They also want to know why Chai and Terraform went separate ways. Chai was made by Shin and Kwon in 2019 and shared things with Terraform until they went separate in 2020.
Excerpt of some of the questions the SEC seeks to ask Shin. Source: CourtListener
Terraform Labs and Kwon Accept SEC Request, Pose Own Queries
Terraform Labs and one of its founders, Kwon, didn’t disagree with the SEC’s request. They also wanted to ask questions and get documents. They had already said that the SEC’s claims are not true.
The SEC took Terraform and Kwon to court in February. They said the cryptocurrencies TerraClassicUSD (USTC) and Terra Luna Classic (LUNC), which were once Terra (LUNA) and TerraUSD (UST), were not real.
The SEC also said Kwon and Terraform falsely said that Chai used the Terra blockchain for transactions.
The SEC believed Terraform and Kwon lied about TerraKRW (KRT), a cryptocurrency connected to Korean money, to make it seem like Chai was using the blockchain.
Terra’s group of cryptocurrencies fell apart in May 2022. About $40 billion disappeared, affecting other cryptocurrencies too.
In April, officials in South Korea charged Shin with lots of frauds. They said he didn’t tell people about the risks of Terraform’s cryptocurrencies.
Kwon is in Montenegro, in jail for four months, because he tried to leave with a fake passport from Costa Rica.
Kwon has legal troubles in the US and South Korea too. Both countries want him to return.
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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