Legal proceedings have been initiated against Shin Hyun-Seong, also known as Daniel Shin, concerning charges concerning alleged illicit profits from the sale of Terra (LUNA) tokens.
The co-founder of Terraform Labs, Daniel Shin, was indicted in South Korea on April 25 in connection with the collapse of Terra and Luna cryptocurrencies. Shin, along with co-founder Do Kwon, established Terraform Labs in 2018.
The company introduced the Luna cryptocurrency later that year and linked it to the algorithmic stablecoin Terra in 2020 to maintain a peg to the value of the US dollar.
Last September, South Korean authorities issued an arrest warrant for Do Kwon, while the US Securities and Exchange Commission filed a securities fraud lawsuit against him in February.
After evading law enforcement for several months, Kwon was also apprehended in Montenegro in March. He now faces additional charges in Montenegro, including allegations of forging his passport in an attempt to travel to Dubai.
Kwon is scheduled to stand trial on May 11 and faces potential extradition to the United States and South Korea.
The collapse of Terra in May 2022 set off a chain reaction, leading to a crash in the cryptocurrency market.
As the platform’s algorithmic stablecoin, USTC, depegged from the US dollar, authorities began investigating the potential involvement of both Kwon and Shin in any illicit transactions preceding and during the market crash.
Trial Preparations Underway for Terraform Labs Co-founder: Shin Hyun-Seong and Seven Accomplices Face Legal Proceedings
On July 10, the Seoul Southern District Court conducted a trial preparation hearing for Shin Hyun-Seong, along with seven alleged accomplices, as reported by News1 Korea.
The 14th division of the Seoul Southern District Court Criminal Agreement will oversee the trial preparations under the guidance of Chief Judge Jang Seong-hoon.
The initial trial, initially slated for May 26, had been deferred due to concerns regarding the fairness of the chief judge.
The controversy stemmed from an interview conducted by the present chief judge, Mr. A, during his tenure as a reporter for the JoongAng Ilbo in 2010. The article highlighted former CEO Shin’s previous engagement in launching Ticket Monster.
The prosecution’s case suggests that Shin and his associates deliberately misrepresented the true potential of the Terra project.
They allegedly deceived investors into believing in the project’s viability through manipulated transactions and the dissemination of false information.
Furthermore, it is claimed that they strategically sold off coins before the Luna coin crash in May of the previous year.
This course of action allegedly resulted in an unfair profit of 462.9 billion won, with a total misappropriation of 376.9 billion won.
Shin is also facing accusations of acquiring approximately 122.1 billion won in unjust gains from investors between 2020 and the following year.
He allegedly deceived investors by presenting a business model centered around the Chai Pay enterprise.
This model falsely claims to secure discounted funds and reduce costs through blockchain technology.
However, Daniel Shin, did not personally attend the first hearing, as reported by local media. His lawyers requested additional time for trial preparation, resulting in the second trial preparation date being set for August 28.
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