The financial crimes unit of the Seoul Southern District Prosecutor’s Office indicted Terraform Labs co-founder Shin Hyun-seong and nine others for the collapse of the Terra stablecoin ecosystem.
The 10 people were charged with fraud, breach of trust and embezzlement and remanded to trial after 11 months of investigation. Prosecutors suspect that those involved in the bankruptcy made illicit profits of almost USD 350 million (460 billion won), Korean newspaper KBS World reported.
Shin is accused of misleading investors and falsely advertising the product to cause considerable losses despite knowing that the project was unfeasible. Prosecutors have also seized the defendants’ assets, estimating their total value at $180 million (246.8 billion won).
The prosecution’s indictment comes just days after a Seoul district court ruled that the Luna (LUNA) token was not a security and did not fall within the scope of the Capital Markets Law. The court had earlier rejected all 10 prosecution requests to indict Shin for securities law violation.
The latest indictment against Shin and nine other executives comes just a month after the arrest in Montenegro of the former CEO, Do Kwon. Montenegrin prosecutors Kwon was accused of forging documents. Kwon also faces multiple charges of securities fraud from the United States Securities and Exchange Commission.
Terra was one of the fledgling cryptocurrency ecosystems that popularized the concept of algorithmic stablecoins. However, in May 2022 the native stablecoin, TerraClassicUSD (USTC), decoupled from its dollar value and the $40 billion ecosystem fell apart.
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