South Korean prosecutors have indicted Daniel Shin, co-founder of Terraform Labs, and nine others in connection with the collapse of two cryptocurrencies, Terra and Luna. Terra was intended to be a stablecoin pegged to the US dollar, while Luna was a utility token. The coins both lost significant value last year, resulting in a loss of $60 billion in market capitalization and a “crypto winter” that impacted the entire industry.
Do Kwon, Shin’s co-founder, is also facing legal issues in several countries. He was arrested in Montenegro in March and is wanted by South Korea for fraud and embezzlement, as well as by the US for securities fraud. He is also accused of forging his passport while attempting to flee to Dubai. Kwon is expected to stand trial in Montenegro on May 11th and could be extradited to South Korea or the US afterward.
Shin’s lawyer argues that his client had no involvement in the Terra and Luna debacle, as he had left the company two years prior to its collapse. The lawyer also notes that Shin returned to South Korea voluntarily and cooperated with the investigation for over 10 months. Prosecutors have seized $184.7 million in assets from Shin and the other defendants. This case highlights the risks and challenges of the cryptocurrency sector.