Thursday, 13 June 2024

Crypto News

Terraform Labs co-founder and nine others indicted in South Korea

Terraform Labs co-founder and nine others indicted in South Korea

The financial crimes unit at the Seoul Southern District Prosecutors’ Office reportedly indicted Terraform Labs co-founder Shin Hyun-seong and nine other individuals for the collapse of the Terra stablecoin ecosystem. 

The 10 individuals were reportedly indicted on charges of fraud, breach of trust and embezzlement and referred to trial after 11 months of investigation. The prosecutor’s office suspected that the individuals involved in the collapse amassed illicit profits of nearly  $350 million (460 billion won), reported KBS World, a Korean daily.

Shin is accused of misleading investors and falsely advertising the product to cause significant losses despite knowing that the project was unfeasible. Prosecutors have also seized the assets of the indicted individuals and estimated them to be worth a total of $180 million (246.8 billion won).

The prosecutor’s indictment comes just days after a district court in Seoul declared that the Luna (LUNA) token was not a security and doesn’t fall under the purview of the Capital Markets Act. The court had earlier refused the prosecution’s ten demands of charging Shin for the violation of security law.

Related: Why did Terra LUNA and UST crash? | Find out on The Market Report

The latest indictment of Shin and nine other executives comes just a month after former CEO Do Kwon was arrested in Montenegro. Prosecutors in Montenegro indicted Kwon on charges of document forgery. Kwon is also facing multiple charges of security fraud from the United States Securities and Exchange Commission.

Terra was one of the budding crypto ecosystems that popularized the concept of algorithmic stablecoins. However, in May 2022 the native stablecoin, TerraClassicUSD (USTC), de-pegged from its dollar value and the $40 billion ecosystem came crashing down.

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