The Seoul court denied a warrant for Daniel Shin

The end of the fall proved to be rich in events for the Terraform Labs team. However, most of them had to deal with arrest warrants filed by the South Korean prosecutors. As part of the ongoing investigation into Terraform Labs, prosecutors first seized assets of platform co-founder Daniel Shin and on Nov. 30 requested arrest warrants for him, three investors, and four developers.

Shin was accused of holding pre-issued LUNA tokens without notifying investors and making $105 million in illegal profits by selling them at the peak price. Prosecutors also claimed that Do Kwon's friend violated the Electronic Financial Transactions Act by using confidential customer data from his fintech firm, CHAI Corporation, to promote LUNA. Terraform Labs itself is under investigation for fraud schemes and tax evasion. 

However, an arrest warrant for Daniel Shin and seven defendants in the crypto platform crash case was dismissed by the Seoul Southern District Court on Dec. 3. According to the ruling, the Terraform Labs co-founder's behavior during the investigation made it hard to believe he would flee from justice or destroy evidence. The court also relied on the suspect’s legal right to defend his case.

This twist came completely unexpected and unaccountable for prosecutors. They admit that it’s hard for them to understand the court’s decision. Given the seriousness of allegations, they show no sign of letting up. Hence, another arrest warrant for Shin is likely to be filed in the near future.

How did other participants of the case react to the court's decision? The defendant's lawyers called the court’s decision a "sound judgment". Terraform Labs is also assured that prosecutors demonstrate a biased position: