The Other Terra Co-Founder Starts His Trial in Seoul

Daniel Shin, co-founder of Terraform Labs, had his first hearing held by Seoul’s Southern District Court on July 10, as reported by local Korean media. Prosecutors addressed several charges, including fraud and market law violations, which Shin and seven of his former employees were charged with on April 25, 2023:

“Since 2018, while hiding the fictitiousness of the Terra project, they deceived investors as if the business was being successfully promoted through transaction manipulation and false publicity, and then disposed of coins before the Luna coin crash in May of last year, making an unfair profit of 462.9 billion won and making 376.9 billion won.”

The indictment followed a meticulous investigation into Terraform’s activities, which allegedly led to the collapse of over $40 billion in investor wealth.

Shin’s defense team asked for more time for trial preparation, claiming the complexity of the case required further technical support, according to South Korean news site Chosun Biz. The court scheduled the second trial preparation date for August 28:

“Until this day, Shin’s side did not submit an opinion on the trial. The list of evidence is extensive, and it is the position that more time is needed to review it.”

Shin also didn’t appear in court because the defendant is not required to attend the first trial in South Korea, Chosun Biz clarified.

The prosecutors’ case concentrated on the Terra Classic (USTC) stablecoin project by Terra. They claimed the project was ill-conceived and labeled it “fictitious.” According to statements released by the Seoul Southern District Prosecutors’ Office:

“Terraform Labs members realized at least KRW 462.9 billion in profit by disposing of their coins before the collapse.”

In addition to the alleged profit, authorities managed to freeze assets worth 247 billion won. Shin’s defense lawyers have staunchly refuted all charges.

The court rejected a secondary attempt by prosecutors to secure an arrest warrant for Shin in May, with the ruling asserting that Shin was unlikely to tamper with evidence or evade the authorities. In Europe, Shin’s fellow co-founder and chief financial officer, Do Kwon and Han Chang-joon, respectively, have been charged with passport and ID fraud in Montenegro and await expedition to either South Korea or the United States.