The fintech company Chai Corporation, by Daniel Shin, co-founder of Terraform Labs Pte, is under South Korean investigation, according to Forkast. Chai Corporation allegedly used customers’ personal information without their consent in order to launch Terra de Chai payment services. South Korean authorities are investigating these allegations as well as the lag of earnings of more than $100 million. All attention has been on Shin since Luna’s collapse and ill-gotten profits. Interpol also issued a red notice against Terra CEO Do Kwon.
Chai Corporation under the authorities’ crosshairs
The Seoul Southern District Prosecutor’s Office confirmed to Forkast that Daniel Shin was searched on Tuesday. Daniel Shin is the founder of Chai Corporation, which is a local payment technology company. He also co-founded Terraform Labs alongside Kwon Do-Hyung aka Do Kwon. Prosecutors have raided Chai Corporation to investigate the allegations against it. Among other things, the company allegedly used customers’ personal information to launch Terra payment services without their consent.
Shin is therefore charged with unfair trade practices for dereliction of duty and violating the law on financial markets. Prosecutors pointed out to this effect that Shin allegedly stored Luna tokens that had been pre-issued without warning regular investors. Then, he would have sold the tokens, by fraudulent act, at 140 billion Korean won, or approximately $106 million.
A link with the fall of Terra Luna?
According to Forkast’s report, Shin will cooperate with authorities to resolve these speculations and clarify these misunderstandings. In fact, Chai and Terraform teamed up in 2019 to integrate Terra’s Korean won-denominated KRT stablecoin into its payment app. But local media reported that Chain’s KRT function has been discontinued since March 2022. Shin claims to have cut ties with Terraform Labs in 2020 when he established Chai Corporation.
The fall of LUNA caused a loss of approximately more than $300 billion in the entire crypto industry. For several months, the South Korean authorities have been investigating this crash, which caused astronomical losses to hundreds of thousands of investors around the world. They issued an arrest warrant for Do Kwon, the CEO of Terra, who remains untraceable so far. But they benefit from the help of Interpol. He is accused of violating local capital markets law by treating Terraform Labs as an unauthorized securities provider.
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
