Daniel Shin, a co-founder of Terra, was the subject of a preliminary hearing in a fraud case today in Seoul.The Seoul Southern District Court’s first preliminary hearing for Shin and seven other former Terra employees was covered by the local media in South Korea.As a result of Shin’s involvement with the failed Terra-Luna cryptocurrency project, Seoul prosecutors accused him of a number of offenses in April, including fraud, duty violation, capital markets act violation, and embezzlement of funds.Shin’s attorneys refuted all the allegations on the same day that he was indicted.
Additionally, the prosecution claims that Shin misled investors by endorsing the Terra stablecoin as a means of payment, despite the fact that such services are illegal in the East Asian nation. The co-founder did not personally show up for today’s court session.Forkast claims that, without providing any additional information, Shin claimed in an email that he skipped today’s court session since it was a preliminary hearing.
The Terra cryptocurrency project, founded in 2018 by Shin and his co-founder Do Kwon, failed in May of the previous year, wiping out the wealth of investors to the tune of nearly US$40 billion.The liquidation of $285 million worth of UST caused the stablecoin to be unpegged from the value of $1, which set off the crisis.As a result, tokens called Terra LUNA were produced in an out-of-control amount.The supply surged to 6.9 trillion tokens in a matter of days from a previous amount of 350 million.The LUNA token’s price dropped more than 99% three times during the crash, nearly vaporizing the asset as it sank below $0.00001675 in less than a week.Since then, the value has increased to $0.00008171.
Many exchanges, including Binance and eToro, delisted LUNA and UST as a result of the fall to discourage traders from holding dangerous bets.This choice sped up the crash by acting as a trigger.Do Kwon, a co-founder who left Europe when the project failed, is currently being held in Montenegro after being given a four-month jail sentence for trying to enter the nation using a fake passport.Kwon has been the subject of extradition petitions from the US and South Korea, who both cite the same charges as Shin.
Do Kwon, however, has refuted all of the accusations, claiming that he obtained the passport from a Chinese company after being recommended to them by a reliable acquaintance.At the same time, Shin’s attorneys have asked for additional time for trial preparation, stating that the case requires technological support and is not a routine criminal prosecution.
The second trial preparation is set for August 28.