Terraform Labs Co-Founder Faces Trial in South Korea
- Prosecutors accused Daniel Shin of violating South Korea’s capital markets law.
- Lawyers representing Shin have asked for extra time to prepare for the trial and get technical help.
- Terra’s collapse in May 2022 wiped off more than $40 billion of investors’ funds.
Daniel Shin, the co-founder of Terraform Labs, has had his first hearing over allegations of receiving illegal profits from the sale of Terra (LUNA). Local sources reported that a trial preparation hearing for Shin and seven other suspected collaborators began in a Seoul Southern District Court.
Shin and nine other people were officially indicted in April by South Korean authorities on a number of offenses, including violating capital markets law. Prosecutors claim that these violations had serious consequences, causing a severe collapse that wiped out more than $40 billion in investor funds.
South Korean prosecutors claim that Shin and his accomplices defrauded investors and made illegal profits totaling almost 462.9 billion won ($354 million) by strategically manipulating the price of some tokens.
Shin is said to have sold about $118 million worth of LUNA prior to its crash in 2022. Shin allegedly founded a fintech company, Chai Corporation, where he used shady strategies to defraud investors of their money.
Shin’s legal team, which included thirty lawyers experienced in financial markets law and digital asset law, as well as former judges and prosecutors, reportedly asked for more time for trial preparation on Monday, stressing that the case is not a basic criminal trial and requires further technical help. Judge Jang Seong-hoon granted the request, citing fairness. The new hearing will take place on August 28.
Shin’s colleague and Terraform Labs co-founder, Do Kwon, has also faced his share of legal troubles. Kwon was arrested in March in Montenegro on suspicion of using fake travel documents. Kwon was later handed a four-month prison sentence in June.
Kwon faces the possibility of being extradited to South Korea or the United States. Like Shin, South Korean prosecutors claim Kwon violated the nation’s capital markets law and remains a controversial figure in the collapse of the Terra ecosystem.
Interestingly, South Korean regulators have introduced several policies to regulate cryptocurrencies and prevent a similar situation to Terra.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
