Terra’s legal trouble continues with South Korea’s Seoul Southern District Court conducting the initial preliminary hearing for Daniel Shin, the co-founder of Terraform Labs, along with seven other former Terra employees.
However, Shin, who stands accused of various offenses linked to the failed Terra-Luna cryptocurrency endeavor, including fraud, did not attend the hearing, citing its preliminary nature and choosing to offer no comment, as revealed by the Asian blockchain news outlet, Forkast.
Shin faces an indictment encompassing numerous charges associated with the failure of the Terra-Luna cryptocurrency project, prominently including allegations of fraud.
The Terra Legal Battle: Allegations Of Fraud And Market Collapse
In the unfolding Terra legal battle, Shin, alongside Do Kwon, played a pivotal role in developing TerraUSD and Luna cryptocurrencies. However, their involvement in these ventures took a dark turn, leading to a catastrophic market collapse that wiped out $40 billion in value.
TerraUSD, originally conceived as a stablecoin pegged to stable assets like the US dollar, experienced a drastic plunge in May 2022, sinking as low as 10 cents and severing its 1-to-1 peg with the US dollar.
Prosecutors investigating the case suspect Shin was well aware that the price peg system was algorithmically unattainable. Nevertheless, he allegedly deceived global investors by artificially maintaining the coins’ prices through manipulative trading practices and fraudulent publicity campaigns.
LUNC market cap currently at $524 million. Chart: TradingView.com
Shin’s Defense: A Team Of Lawyers And Family Connections
In a bold move to combat the charges brought against him, Shin has reportedly assembled a formidable legal team comprising over 30 lawyers. Among them, nearly a dozen attorneys hail from a top-tier law firm boasting former prosecutors among their ranks. With this robust legal representation, Shin aims to mount a vigorous defense as he steadfastly maintains his innocence.
Despite earlier attempts by law enforcement to secure an arrest warrant against Shin, the courts ultimately ruled in his favor, stating that he posed no flight risk and was actively cooperating with investigators. However, concerns lingered that Shin might attempt to dispose of his assets, leading the prosecution to seize over $100 million belonging to him.
Given the high-profile nature of the case and Shin’s family connections, the legal tussle between him and the prosecutors is expected to attract significant public attention.
A May Forkast report notes that Shin’s grandfather, Shin Jik-soo, previously served as justice minister in the country, adding a layer of intrigue to the proceedings. Shin’s uncle, Hong Seok-hyun, holds the position of chairman at JoongAng Holdings, a prominent media conglomerate.
Featured image from Terraform Labs, Envato Elements