Failure to secure arrest warrant for Terraform co-founder clouds extradition plan for Do Kwon

Shin Hyun-sung, the co-founder of Terraform Labs, appears at the Seoul Southern District Court for questioning, Thursday. Korea Times photo by Lee Han-ho

By Lee Yeon-woo

Despite the arrest of Do Kwon, the founder of Terraform Labs, who was on the run in Montenegro, prosecutors in Korea have been unable to obtain arrest warrants for other persons of interest in the case. This could complicate Korea's efforts to have Kwon extradited.

According to legal sources, Monday, the Seoul Southern District Court rejected the prosecution's request for an arrest warrant for Shin Hyun-sung, a co-founder of Terraform Labs also known as Daniel Shin, on Thursday.

This is the second time the court has denied the prosecution's request to detain Shin. The request for Shin's arrest warrant has received significant attention, particularly given that it followed the arrest of Do Kwon. However, the outcome remained the same with the court ultimately denying the prosecution's request.

The court's decision was based on its assessment that Shin posed no risk of flight or tampering with evidence. “It may take a significant amount of time to investigate other accomplices who are currently overseas. Considering the arrest of a major accomplice (Do Kwon), it's hard to justify that Shin posed a risk of evidence tampering.”

The prosecution's attempt to arrest a former CEO of TMON, who is only identified by his surname Yoo, was also unsuccessful as the court rejected its request on Friday. Yoo is accused of promoting Terra in exchange for Luna cryptocurrency worth 3 billion won ($2.27 billion).

Shin Hyun-sung, left, and Do Kwon, co-founders of Terraform Labs / Korea Times file

As the Korean prosecution has repeatedly failed to secure the arrest of figures connected to Terraform Labs, concerns have arisen that the plan to extradite Kwon to Korea may face difficulties.

Initially, the prosecution had sought to appeal to the Montenegro government the necessity of extraditing Kwon to Korea, citing the fact that other alleged accomplices were also under investigation in the country. However, the failure to arrest the others shows the prosecution may lack legal grounds.

Montenegro Justice Minister Marko Kovac said during a press conference on Wednesday that “Montenegrin authorities will decide which country to extradite them to according to the committed crime, the place where it was committed and their citizenship.”

The prosecution team is planning to analyze the reasons behind the court's rejection of the arrest warrant requests and consider making changes accordingly.

After being arrested with a companion at the airport of Montenegro weeks ago, Kwon is currently under investigation in Montenegro for his alleged possession of forged documents. The United States is also seeking to extradite Kwon on fraud charges, while the Singaporean police have initiated a probe linked to Kwon as well.