Terraform Labs’ co-founder, Daniel Shin, denied involvement in the notorious collapse of Terra amidst looming charges of fraud and embezzlement.
On a day charged with legal tensions, Shin clarified his stance before the Seoul Southern District Court, categorically refuting any culpability in the financial fiasco that shook the crypto world.
Shin’s legal team, well-prepared and assertive, directed the blame towards Do Kwon, Shin’s former business partner and co-founder, painting him as the architect of Terra’s downfall.
The defense highlighted Kwon’s alleged role in initiating external attacks on the company, contributing to the implosion of Luna Classic and the algorithmic stablecoin UST.
They specifically underscored the mismanagement within the Anchor protocol, which they portrayed as a chief catalyst in Terra’s unfortunate spiral.
Anchor, a yield-generating platform atop Terra’s blockchain, promised UST depositors a staggering 20% interest, raising eyebrows and suspicion alike.
Shin, who parted ways with Terra and Kwon in 2020, now finds himself in the hot seat, facing serious allegations that include breach of duty, embezzlement, fraud, and violation of South Korea’s Capital Markets Act.
While Shin battles the charges in South Korea, Kwon, now an international fugitive, faces a legal dilemma of his own.
Detained at an airport, with a forged Costa Rican passport in his possession and a subsequent four-month prison sentence in Montenegro, Kwon could see up to 40 years in a South Korean prison if extradited and convicted.
Simultaneously, the U.S. also claims the right to try Kwon, further complicating the legal maze. The U.S. Securities and Exchange Commission, undeterred by these developments, continues its pursuit of legal action against Terra’s former head.
The trial has thrust the question of LUNA’s status, whether it is a security or not, into the spotlight, with the prosecution and defense locking horns over its classification.
The case has also reignited discussions about the viability of using virtual assets as a payment method, with the