A judge has authorized the U.S. Securities and Exchange Commission (SEC) to cooperate with international authorities to question one of Terraform Labs’ co-founders.
Court records show that District Judge Jed S. Rakoff approved the SEC’s request to seek assistance from authorities in South Korea regarding obtaining testimony from Daniel Shin, who co-founded Terraform Labs with Do Kwon.
The SEC alleges that Terraform Labs and Kwon have “repeatedly misled and defrauded investors” by telling them that Chai used the Terra blockchain to settle transactions that would provide value to Terra’s proprietary token, LUNA.
In February, the SEC alleged that Kwon transferred 10,000 Bitcoin (BTC), then worth $250,000,000, from Terraform Labs and the Luna Foundation Guard (LFG) to a Swiss bank account, while LUNA and its algorithmic stablecoin TerraUSD UST imploded goods.
According to the Korean medium Digital Asset, the Swiss authorities reportedly froze $ 26 million worth of assets last month. Swiss digital asset bank Sygnum froze the crypto after Swiss authorities received requests from the New York Attorney’s Office and the SEC.
Kwon was sentenced to four months in prison in Montenegro in June for using a forged Costa Rican passport, though these relatively minor charges are likely just the beginning of the outspoken Terra founder’s troubles.
Authorities in the United States and South Korea are looking to extradite the disgraced crypto executive, who faces multiple charges over the $40 billion Terra ecosystem crash.
Dan Sunghan, the director of the financial crimes investigation bureau at the Seoul Southern District Prosecutor’s Office, recently told Bloomberg that Kwon could be behind bars for more than four decades.
South Korean authorities reportedly charged Shin with fraud in April.
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