Terraform Labs co-founder Shin Hyun-Seong, also known as Daniel Shin, has reportedly begun trial preparations in South Korea for charges related to allegedly illicit profits from the sale of Terra (LUNA). The trial preparation hearing took place in a Seoul Southern District Court after Shin’s indictment in April. According to prosecutors, Shin and seven alleged accomplices deceived investors and manipulated token prices through media coverage and transactions, resulting in unfair profits of around 462.9 billion won ($354 million at the time).
Reports suggest that Shin sold approximately $118 million worth of LUNA tokens before their price crashed in May 2022. Later, he founded the fintech firm Chai Corporation, where similar tactics were allegedly employed to illegitimately profit from investor funds. However, Shin’s attorney has denied claims that he made profits through illegal methods and maintains his innocence.
Another co-founder of Terra, Do Kwon, was arrested in March in Montenegro for allegedly using forged travel documents. In June, he received a four-month prison sentence, but he may face extradition to the United States or South Korea afterwards due to an arrest warrant issued by South Korean prosecutors in September 2022 for allegedly violating capital markets laws.
The collapse of Terra in May 2022 had significant repercussions on the crypto market. The platform’s stablecoin USTC depegged from the U.S. dollar, triggering an investigation into Kwon’s and Shin’s potential involvement in any illicit transactions leading up to and during the crash.
It is important to note that Shin’s LinkedIn profile indicates that he had not been involved with Terra since January 2020, although this information does not necessarily rule out any investments made with the company’s stock or tokens.