Daniel Shin, co-founder of Terraform Labs, also known as Shin Hyun-Seong, is reportedly facing trial for charges related to allegedly deriving illegal profits from the sale of Terra (LUNA) tokens. The trial preparation hearings for Shin and seven alleged accomplishments began at Seoul Southern District Court after he was indicated in April. Prosecutors accuse them of defrauding investors and manipulating token prices through media reports and transactions, resulting in dishonest profits of approximately 462.9 billion won (over $354 million).
According to reports, Shin sold around $118 million worth of LUNA tokens before the token's price crash in May 2022. He later founded Chai Corporation, a fintech firm where he allegedly employed similar tactics to illegally profit from investor funds. lawyers have denied reports of selling LUNA for profit or gaining through illegal means. While Shin's LinkedIn profile indicates he has not been involved with Terra since January 2020, it does not provide information about his stock or token investments in the company.
Another co-founder of Terra, Do Kwon, was arrested in March on suspicion of using forged travel documents and was sentenced to four months in prison in June. Kwon may face extradition to the United States or South Korea, where prosecutors issued an arrest warrant for alleged violations of market rules in Seoul.
The collapse of Terra in May 2022 triggered a series of events that led to a cryptocurrency market crash. The depegging of Terra's algorithmic stablecoin, USTC, from the US dollar prompted authorities to investigate Kwon and Shin's potential involvement in illic it transactions leading up to and during the crash.
