Terra co-founder Daniel Shin charged with fraud in South Korea

Screenshot: UDC via YouTube

Daniel Shin, the co-founder of Terraform Labs, was indicted in South Korea in connection with the collapsed Terra and Luna cryptocurrencies. According to reports from Bloomberg and the local Yonhap News Agency, Shin was charged on Tuesday with offenses including fraud, breach of duty, and embezzlement.

Prosecutors at Seoul Southern District Court also indicted nine other people with ties to Terra, some of whom had roles in marketing, systems development, and management, as reported by Bloomberg. The outlet also reports that prosecutors have frozen a total of 246.8 billion won (about $184.7 million) in assets from the individuals they charged.

Shin created Terraform Labs with co-founder Do Kwon in 2018. The company released its Luna cryptocurrency later that year and then linked the token to its algorithmic stablecoin Terra in 2020 to (in theory) keep Terra pegged to a dollar value. When Terra began to slip last year, it brought down Luna with it, burning billions of dollars in the process.

South Korean authorities issued a warrant for Kwon’s arrest last September, while the US Securities and Exchange Commission sued Kwon for securities fraud in February. Kwon was finally taken into custody in Montenegro in March after spending several months trying to evade the police. There, he faces yet another charge, as Montenegro officials accuse the crypto entrepreneur of forging his passport when trying to fly to Dubai. He’s set to stand trial on May 11th and also faces extradition to the US and South Korea.

“Shin has nothing to do with the Terra, Luna collapse as he left the company two years before the fallout,” Shin’s lawyer, Kim Ki-dong, said in a statement provided to Bloomberg. “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.”

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