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Terra Co-Founder's Home In South Korea Raided By Authorities Last Week

Terra Co-Founder’s Home In South Korea Raided By Authorities Last Week

The probe into the failed “stablecoin” produced by Terra has intensified, as co-founder Daniel Shin’s home was raided by authorities this week. 

His home in Seoul was visited this week, as was the office of the app Chai, which Shin also founded, according to Decrypt.

Shin and Terra co-founder Do Kwom, who has been in the news non-stop since Luna’s collapse, launched Terraform in 2018 in an attempt to compete with names like PayPal. They raised nearly $100 million between an ICO and funding rounds. As Zero Hedge contributor Quoth the Raven noted weeks ago, Terra and Luna were also pushed by crypto mega-bull Mike Novogratz.

Shin stepped down as Terraform Labs CEO in March 2020 and reduced his stake in the company in order to focus on Chai, which was an app that utilized the Terra blockchain to try and provide cheaper transactions. 

The Seoul Southern District Prosecutors Office confirmed the raids and noted that two other firms that Chai has ties to were also raided. Regualtors continue to gather information to weigh allegations that Do Kwon may have collapsed TerraUSD on purpose. 

Kwon is also being examined for whether or not he “dodged taxes by moving profits from cryptocurrency transactions to an offshore account,” the Decrypt report says. 

Also last week, South Korean regulators visited the offices of 7 crypto exchanges, including Upbit, Bithumb and Coinone, the report says. They seized transaction records, among other materials. 

We noted in May that Do Kwon was also behind another failed algorithmic stablecoin called “Basis Cash”, which launched on ethereum in 2020. 

Basis Cash (BAC) also “sought to maintain a $1 peg through code, not collateral,” CoinDesk, who broke the story, wrote this Spring, after Luna’s collapse.. BAC ultimately failed, the report notes, never getting to dollar parity and eventually crashing to “well below 1 cent” where it trades now. 

CoinDesk called stablecoin Terra’s recent collapse “history repeating”. 

Hyungsuk Kang, a former engineer at Terraform Labs, confifmed that Basis Cash was a side project from some of Terra’s creators, including Kwon. A second anonymous employee referred to Kwon as pseudonymous BAC founder “Rick Sanchez”.

Kang told CoinDesk: “Basis Cash wasn’t tested at the moment, and we weren’t even sure” it would work, Kwon “wanted to just test it out. He said that this was a pilot project for doing that.”

Tyler Durden
Sun, 07/24/2022 – 08:45

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