Terraform Labs Co-founders Were Warned of Danger Ahead Back in 2018 – South Korea’s Financial Regulator
Terraform Labs co-founders, Do Kwon and Daniel Shin, were against the red flags cited that they could affect their business if they proceeded to launch. However, despite all warnings, the co-founders went ahead with the launch.
In addition to claims made by the South Korean Financial Regulators, a local news outlet, YTN, revealed that South Korea’s Financial Supervisory Service (FSS) also made similar warnings to Terraform co-founders in 2018.
Despite all efforts to halt its launch, the executives of Terraform reportedly sought the consent of the Financial Supervisory Service (FSS) over the form of its business registration. Then, the co-founders asked if its firm could be registered as an electronic financial, payment, or crypto asset payment business.
The FSS further noted that crypto asset-powered solutions couldn’t be registered as a payment business since crypto assets are not a legal form of making payment transactions.
Furthermore, the FSS pointed out flaws of Terraform’s business model to the co-founders, Kwon and Shin, in 2018 and subsequent years. However, a broadcast from KBS (another media outlet) revealed that all efforts to analyze and warn of the dangers ahead for the firm were ignored by Terraform.
Terraform Warned By Financial Regulators
According to YTN, the FSS’ stance and prior conversations with Terraform have been reported to appropriate authorities, the Security Crime Joint Investigations Team and Seoul Southern District Prosecutors Financial Office.
Therefore, investigations by the prosecution team ascertained that charges should be pressed against Terraform co-founders (Kwon and Shin). The team resorted to a verdict with claims that both parties willingly ignored all warnings and delved into deceiving its investors.
Nevertheless, Shin remained in South Korea with his legal team claiming that the FSS warnings had no precise meaning. Hence, the warning didn’t clearly state that Terraform shouldn’t proceed with its business.
Meanwhile, Shin has been summoned on three occasions and questioned by prosecutors who, before now, were indecisive on his arrest. However, it has finally decided to ask a court to issue a warrant for his arrest.
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