Criminal Charges for Terraform Labs Co-Founder and Others After Terra and Luna Crash
Daniel Shin and nine others are accused of violating capital market laws, illegal trading and breach of trust in relation to the Terra project, which caused a $60 billion loss for investors last year.
Terraform Labs co-founder Daniel Shin and nine others associated with the Terra cryptocurrency project - which imploded last year - are facing criminal charges in South Korea, accused of violating capital market laws, illegal trading and breach of trust, according to Bloomberg.
Shin and seven others are charged with illegal trading, while two others are charged with breach of trust. Prosecutors have so far frozen about $185 million of the defendants' assets. The charges stem from the collapse of Terra and Luna, two cryptocurrencies linked to Terraform Labs, which caused a $60 billion wipeout for global investors last year.
“Shin has nothing to do with the Terra, Luna collapse as he left the company two years before the fallout,” said Shin’s lawyer Kim Ki-dong in a statement. “He voluntarily returned to South Korea immediately after the collapse, and has been faithfully cooperating with the probe for over 10 months, hoping to contribute to fact finding.”
His business partner, Do Kwon, was arrested in Montenegro last month for allegedly defrauding investors and violating financial regulations. Kwon, who fled South Korea where he is also wanted by the authorities, faces extradition to the US.
At issue is the failure of the algorithmic stablecoin terraUSD (UST) and its sister token Luna. Both collapsed in May last year, triggering a wider $2 trillion decline in the crypto market. Prosecutors said the Terra project was a "fabrication" from the start, and that the algorithm that helped keep TerraUSD at a constant price was infeasible. Shin and others charged caused "astronomical damages" to global investors, according to the statement.