Terra Co-Founder Faces Trial in Seoul Court Case on Fraud Charges

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Key takeaways:

  • Daniel Shin, a co-founder of Terra, has been indicted on several counts and is currently undergoing preliminary trials in South Korea.
  • The court has scheduled the second hearing date of August 28 after it granted the request.

Prosecutors have called Terra co-founder Daniel Shin and 7 other people to court on various offenses while South Korea pursues Do Kwon’s extradition from Montenegro.

Daniel Shin, a co-founder of Terraform Labs, and seven other former Terraform workers appeared before the Seoul Southern District Court on Monday for the first preliminary hearing over charges of fraud, breach of duty, embezzlement, and contravening the Capital Markets Act. 

Judge Jang Seong-hoon was asked for more time during the first hearing at Seoul Southern District Court by the attorneys representing Terra co-founder and former CEO of Chai Corp Daniel Shin. According to a local news source, Daniel Shin did not personally attend the hearing on July 10.

The court has scheduled the second hearing date of August 28 after it granted the request. The ongoing delays are disappointing for the prosecutors. Judge’s statement:

“We will check the opinions of the lawyers and reopen the trial preparation date to decide the opportunity for defense and the order of interrogation.”

The first trial was supposed to start on May 26 but was delayed until today because of concerns about the prominent judge’s impartiality. Daniel Shin assembled a team of 30 attorneys for his defense, including former judges, prosecutors, and attorneys skilled in financial markets and disputes involving digital assets.

The allegations against Shin Hyun-seong and his associates go back to 2018 when they were accused of deceiving investors by concealing the Terra project’s fake nature and publicizing it falsely through transaction manipulation. Then, before the Luna coin crash in May 2020, they disposed of the coin, making an illegitimate profit of 462.9 billion won and robbing 376.9 billion won.

The prosecution claims that Shin Hyun-seong began selling Luna coins when the anchor protocol was introduced in March 2021, which increased the token’s value. From that point until immediately before the crash, he allegedly made at least 154.1 billion won in profits. They think he was the primary offender who orchestrated and planned the collision.

Shin is also accused of defrauding investors out of 122.1 billion won by falsely promising them a company that would use blockchain to secure discount funding and cut costs.

Kwon was given a four-month prison term by a district court in Montenegro last month. The court determined that Kwon and Han Chang-Joon, the former chief financial officers of Terraform, were guilty of using forged travel documents. The two are accused of forging their passports.

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