(Bloomberg) -- South Korean prosecutors’ request for an arrest warrant for Terraform Labs co-founder Daniel Shin was dismissed for a second time by a local court, Yonhap News reported. 

The Seoul Southern District Court said on Thursday that there still remain contentions regarding allegations against Shin and that he is unlikely to be a flight risk or destroy evidence, according to Yonhap. Shin co-founded Terraform Labs together with Do Kwon, who was arrested in Montenegro last week after several months on the run from authorities. 

The Terra blockchain project Shin and Kwon developed imploded almost a year ago when the stablecoin linked to it, TerraUSD, slumped from its dollar peg. US prosecutors, who have charged Kwon with fraud and are seeking his extradition, have said the collapse of TerraUSD and its sister token, Luna, cost investors some $40 billion. 

• Read more:  Do Kwon Arrested in Montenegro, Faces US Fraud Charges 

Shin faces charges including of fraud, breach of duty and capital market law violation, according to prosecutors. The court in December rejected an earlier effort to obtain an arrest warrant for him for similar reasons.

Shin has denied the allegations against him. His lawyers previously said that he split from Terraform Labs in 2020 and hasn’t been involved in its operations since.

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