The Freeze Order Comes From South Korean Authorities Assets Belonging to Co-Founders of Terraform Labs
According to reports, the Seoul Southern District Court granted the request made by local prosecutors on Thursday to place a freeze on approximately 104 million dollars worth of assets belonging to Shin Hyun-seung, also known as Daniel Shin, the co-founder of Terraform Labs. The pre-indictment freeze order is a preventative measure that is designed to stop a suspect from getting rid of the proceeds of a crime before the case goes to trial.

Prosecutors have leveled allegations against the Terra co-founder, alleging that he made "unfair" profits of approximately 140 billion Korean won by selling pre-issued cryptocurrency LUNA, which is now known as luna classic (LUNC), without providing investors with the appropriate level of disclosure. On Thursday, it was reported that Shin told the prosecutors that he did not sell the cryptocurrency when its price was at its all-time high before the token crashed.

According to what Professor Hwang Suk-jin of the Department of Information Security at Dongguk University, who is also a frequent speaker on crypto policy before the National Assembly of South Korea, has been quoted as saying:

There is an issue with the pre-mining process. The reason for this is that they did not provide adequate disclosure when they issued the tokens.

The professor went on to say that as an illustration, investors "will inevitably suffer losses" if they "thought 1,000 tokens have been issued when in fact 10,000 have been issued."

Shin and Chai corp., a local payments tech company that he founded, are currently the subject of an investigation because it is suspected that they used customer information in the launch of Chai's Terra payment services without first obtaining their customers' consent. It was reported that local law enforcement conducted a raid on the payments company on Thursday.

Since May, prosecutors in South Korea have been conducting their own investigation into the failure of LUNA and have issued an arrest warrant for Kwon Do-Hyung, also known as Do Kwon, who along with Shin was a co-founder of Terraform Labs. In addition, Interpol has issued a Red Notice for his arrest. The South Korean authorities announced one month ago that they had placed a freeze on Kwon's cryptocurrency assets. However, Kwon asserted that the coins in the freezer were not his property.