South Korean Investigators Raided Crypto Firm Chai Over Collapsed Terraform Labs

South Korean investigators raided a firm called ‘Chai Corporation’ because it was founded by Daniel Shin, one of the founders of collapsed Terraform Labs.

FTX’s fiasco wasn’t an easy burden to deal with as the fiasco has alerted global enforcement authorities in tightening their oversight over the crypto industry.

Co-Founder of Terraform Labs Questioned By South Korean Authorities

It has been over a year now since when the crypto industry has fallen to the ground. The fall brought grave consequences for many businesses and individuals associated with the industry.

Amongst the fallen, there were several globally popular crypto trading platforms which included amongst others Terraform Labs and the recently collapsed FTX.

While FTX is still dealing with the collapse but Terraform Labs’ fall took place in May this year. The reasons for the fall were noticeable more or less the same with which FTX is currently dealing with.

Apart from facing similar consequences, both firms i.e. FTX and Terraform shared other similarities as well. For instance, like FTX, Terraform too was built by two main founders namely Daniel Shin and Do Kwon.

Second Co-Founder of FTX

As was the case with Gary Wang i.e. second co-founder of FTX, Shin of Terraform, enjoyed the status of being the silent partner.

It was reported in the local press in South Korea and later the news was adopted by Forkast that law enforcement agencies raided Chai Corporation.

Chai Corporation is a separate entity rendering payment services but it belongs to the same person who founded Terraform i.e. Daniel Shin.

It has reportedly been alleged by South Korean law enforcement authorities that Shin was actively involved in Terraform’s operations and its day-to-day affairs.

Even Fatman, a whistleblower, noted in his May report that Terraform’s founder Kwon was working on a separate project through Shin’s separate entity.

The whistleblower alleged further that Kown and Shin was supposed to launch a crypto token for which Chai’s payment services were to be utilized.

The allegation raised by Fatman was that Terraform had minted a crypto token allegedly known as ‘SDT’ ahead of its launch.

Shin’s Chai Corporation was hence used for cashing out SDT by converting SDTs into Terraform’s Korean won token, alleged Fatman.

In this regard, several other reports surfaced during the time which too raised eyebrows over the connection between Kwon and Shin.

One of the reports, which got published in March this year, suggested that Terraform’s Korean won token was discontinued

When Chai Corporation was raided, Forkast reported on 14th November that the prosecutors questioned Shin.

As per further reports, Shin has been called upon by the authorities to record his statement.

Shin has been suspected by the authorities of having been involved in acts such as mal business practice, capital markets violations, and breach of responsibilities.

On the other hand, Shin has categorically denied his connection with Terraform and its founding member, Kwon. He stated that since he had established a separate business and hence he got himself disassociated with Terraform since 2020.