The financial crimes unit of Seoul's Southern District Prosecutor's Office has reportedly instructed Terraform Labs co-founder Shin Hyun-seong and nine others for damaging the Terra ecosystem.
The 10 were reportedly indicated on charges of fraud, breach of trust and embezzlement, and were handed over for trial after an 11-month investigation. The prosecutors' office suspects individuals involved in the collapse amassed nearly $350 million (460 billion ion won) in illegal profits, South Korean daily KBS World reported. Shin is accused of misleading investors and falsely promoting the product to cause substantial losses knowing the project was not viable. Prosecutors also seized the assets of the indicated, with an estimated total value of $180 million (2 46.8 billion won).
The prosecutors' indictment comes days after the Seoul District Court declared that LUNA tokens are not securities and do not fall under the jurisdiction of the Capital Markets Act. The court had earlier rejected the prosecution's 10-count request to accuse Shin of violating law security. The latest indictment against Shin and nine other executives comes a month after former CEO Do Kwon was arrested in Montenegro. Montenegro prosecutors charged Kwon with falsifying documents. Kwon also faces multiple security fraud charges from the SEC.
Terra is one of the emerging crypto ecosystems that popularized the concept of algorithmic stablecoins. However, in May 2022, the native stablecoin TerraClassicUSD (USTC) decoupled from its USD value, and the $40 billion ecosystem collapsed.
