South Korea seizes $104M from Terra co-founder suspecting unfair profits

While crypto exchange FTX stole the limelight from other fallen ecosystems, South Korean authorities continue their efforts to bring closure to the victims of the year’s first crypto crash — Terraform Labs. Nearly six months after the Terra (LUNA) blockchain was officially halted, South Korean authorities froze approximately $104.4 million (140 billion won) from co-founder Shin Hyun-seong based on suspicion of unfair profits.

The decision to freeze Shin’s asset worth over $104 million was approved by the Seoul Southern District Court, which was based on a request from the prosecutors. The claim related to Shin’s involvement in selling pre-issued Terra (LUNA) tokens to unwary investors.

Based on suspicion of profiting from unwarranted LUNA sales, the district court froze the allegedly stolen funds until further investigations are underway, reported local news media YTN.

“Reports that CEO Shin Hyun-seong sold Luna at a high point and realized profits or that he made profits through other illegal methods are not true,” Cointelegraph previously quoted Shin’s attorney.

The preindictment preservation of the funds is a way of preventing bad actors from disposing of stolen funds and causing more financial damage or losses for the investors.

Shin is currently being investigated by South Korean authorities on two charges — making unfair profits from issuing in-house tokens LUNA and TerraUSD (UST) and leaking customer transaction information of Chai — a Korean payment app linked to Terra — to Terraform Labs.

On November 14, the South Korean prosecutors requested the accused co-founder appear in court as part of an investigation into the firm's collapse.

Related: Terra Labs, Luna Guard commission audit to defend against allegations of misusing funds

In the first week of November, the prosecutors accused Terra co-founder Do Kwon of manipulating Terra’s price.

"It's highly disappointing to see the Korean prosecutors continue to try to contort the Capital Markets Act to fit their agenda and push baseless claims. Prior judicial decisions and statements by the Korean financial authorities, including the FSC, establish that cryptocurrency tokens are not investment contract securities," said Terraform Labs spokesperson in a written statement to Cointelegraph.