By questioning Shin, SEC wants to gather more information about Do Kwon's ties with Chai Corporation.
A recent court decision has granted the US Securities and Exchange Commission (SEC) the authority to delve deeper into the operations of Terraform Labs by questioning one of its co-founders, Daniel Shin, in South Korea.
The decision was approved by District Judge Jed Rakoff on August 16th, following a motion by the SEC dated July 10th.
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The Commission expressed interest in speaking with Daniel Shin, who also has ties to Chai Corporation, a payment service provider based in Seoul. The SEC intends to extract more details about the involvement of Do Kwon, another Terra co-founder, in Chai and the specifics of the relationship between Terraform and Chai.
In April, Daniel Shin found himself facing multiple fraud charges in South Korea. Authorities accused him of downplaying the investment risks associated with Terraform's digital currencies.
It's worth noting that Shin and Kwon co-founded Chai in 2019, and for some time, both Terraform and Chai shared resources and facilities. However, they parted ways in 2020, and the reasons behind this separation have become a point of interest for the SEC.
The relationship between Terraform Labs, Kwon, and Chai Corporation has been under the microscope for a while. The SEC filed a lawsuit against Terraform Labs and Do Kwon earlier this year.
The regulatory body alleges that Terraform's cryptocurrencies, previously known as Terra (LUNA) and TerraUSD (UST), were involved in fraudulent activities. Moreover, there were accusations against Kwon and Terraform for misrepresenting Chai's use of the Terra blockchain for transaction purposes. According to the SEC, Kwon and Terraform manipulated transactions with their stablecoin TerraKRW (KRT) to portray Chai's active usage of the blockchain.
Do Kwon, is currently serving his prison sentence in Montenegro over the use of fake documents.
As the saga unfolds, the SEC's investigations into Terraform Labs and its associations shed light on the complexities and challenges within the crypto industry. The coming months are likely to reveal more about this intriguing case.
