Korean court conducts preliminary hearing for Terra co-founder
The Seoul Southern District Court has conducted a preliminary hearing for Terraform Labs’ co-founder Daniel Shin and several other former project employees.
Shin, the co-founder of Terraform Labs and former CEO of Chai Corporation, is set to undergo his initial trial on July 10th. His trial, centered around accusations of fraudulent transactions under the Capital Markets Act, will take place within the Seoul Southern District Court’s 14th division.
The prosecution alleges that the group of people associated with Terraform Labs strategically misrepresented the project’s success to investors, thereby increasing their confidence and capital investment. The accused then sold off their Luna coin holdings before a significant market crash in May 2022, securing a professedly undeserved profit of 462.9 billion won ($357 million) and allegedly defrauding investors of 376.9 billion won ($291 million).
It is claimed that Shin began to sell Luna coins following the launch of the anchor protocol in March 2021. This action is thought to have precipitated a surge in the Luna Coin‘s price, enabling him to accumulate profits amounting to at least 154.1 billion won ($119.1 million) before the market crash. Prosecutors suspect Shin to have orchestrated this course of events.
Furthermore, allegations suggest that Shin misled investors about the potential profitability of the Chai Pay business throughout 2020 and the subsequent year. By depicting it as a venture that could acquire discount funds and cut costs via blockchain, Shin is accused of unfairly amassing 122.1 billion won ($94.4 million).
Terra lawsuit in South Korea
Shin and seven others were indicted last April for involvement in Do Kwon’s multi-billion dollar Terra project implosion last year.
Following his indictment a few months ago, South Korean authorities have held the first hearing for Terraform Labs co-founder Daniel Shin and seven other former Terraform Labs employees suspected of having a hand in the abrupt collapse of the Terra algorithmic stablecoin and cryptocurrency project last year.
Shin, summoned to testify before Korea’s financial audit committee last September, faces multiple charges, including misleading and defrauding investors by promoting Terra as a payment system.
Per an email correspondence with Forkast, Shin claimed he was absent during the preliminary hearing, as he had no comment.
A South Korean court froze $104 million worth of crypto assets belonging to Shin in November last year, citing a breach of duty and violation of the country’s capital markets law, amongst other allegations.
Do Kwon’s trial in Montenegro
Meanwhile, another Terra co-founder, Do Kwon, serves a four-month jail term in Montenegro for travel documents forgery.
In June, Swiss authorities froze around $26 million worth of bitcoin (BTC) and other cryptocurrencies belonging to the Terraform Labs’ outfit, Do Kwon, and other company officials. The crypto assets were initially held at Sygnum Bank.
While Do Kwon and other Terraform Labs executives face an uncertain future, devs and members of the Terra ecosystem remain determined to revive it.
Do Kwon remains in Montenegro, while United States and South Korean authorities have requested his extradition.
