South Korea has commenced the trial proceedings for Daniel Shin, the co-founder of Terraform Labs and former CEO of Chai Corporation. The preliminary hearing took place on July 10 at the Seoul Southern District Court, involving Shin and seven other individuals connected to Terraform Labs.
Daniel Shin was indicted on fraud charges and violations of capital markets law in April, which led to the freezing of approximately $184 million worth of assets.
Terra-Luna, an algorithmic stablecoin launched by Terraform Labs, suffered a severe collapse in May 2022 when it lost its peg to the US dollar. This collapse had a ripple effect on the cryptocurrency market, causing a loss of over $40 billion.
Meanwhile, Daniel Shin’s co-founder, Do Kwon, is also facing legal consequences of his own. He was sentenced to four months in jail in Montenegro for possessing a falsified passport and attempting to travel through the country. Following his sentence, Kwon may face extradition to either South Korea or the United States, as both countries have filed extradition requests.
The Charges Against Daniel Shin
Shin’s charges stem from allegations of fraud and embezzlement related to the collapse of the Terra-Luna project. Prosecutors claim that Shin deceived investors by promoting the Terra stablecoin as a payment system despite being aware that such services were prohibited.
It is believed that Shin played a leading role in manipulating transactions and promoting the project while concealing its true nature.
However, Shin’s defense team requested additional time to prepare for the trial, citing the extensive technical aspects involved in the case. The voluminous evidence record, spanning 48 volumes, contains specialized IT-related knowledge, necessitating the input of experts to review and provide insights. The court granted the request and scheduled the next trial preparation date for August 28.
The court proceedings will further examine Shin’s role in the collapse of Terra-Luna and his alleged fraudulent activities by carefully considering the evidence and arguments presented by both the prosecution and the defense.