Terra Co-founder Daniel Shin Indicted in South Korea

Indictment of Terraform Labs Co-founder

South Korean prosecutors have indicted Daniel Shin, co-founder of Terraform Labs, along with nine others on multiple charges, including fraud and illegal trading. The indictment follows the Seoul Southern District Court's dismissal of securities violation charges related to the Terra collapse last year.

Charges and Allegations

Daniel Shin and his associates face serious allegations, including violations of capital markets law. Prosecutors accuse them of profiting illegally and contributing to the failure of Terra’s algorithmic stablecoin. The Seoul Southern District Prosecutors’ Office has frozen assets worth 246.8 billion won ($187.7 million) as part of the investigation.

Roles and Profits

The individuals charged were associated with various roles within Terraform Labs, encompassing marketing, systems development, and management. They allegedly amassed 463 billion won in profits before the company’s collapse in May last year. These actions are believed to have caused significant financial damage to investors globally.

Stablecoin Controversy

Prosecutors argue that Terraform Labs' algorithmic stablecoin was inherently flawed from the start. The mechanism intended to maintain the token's stability was deemed unfeasible, branding it a "fabrication." This has been central to the charges against Shin and his team, who are accused of misleading investors.

Legal Defense and Other Developments

Daniel Shin has consistently asserted his innocence, claiming no involvement with Terraform Labs since 2020. Meanwhile, Do Kwon, the other co-founder, faced similar charges in late 2022, with South Korean authorities seeking his extradition from Montenegro.

These proceedings underscore the ongoing legal challenges for Terraform Labs' leadership amidst scrutiny of its financial practices and project viability.