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- 1 A fraud trial awaits Terraform Labs co-founder Daniel Shin over UST collapse.
- 2 The accusations include violating financial transaction regulations and conducting illegal sales of Luna tokens.
- 3 Shin’s defense requests more time to review the extensive case files, leading to the rescheduling of the next hearing to August 28.
The much-anticipated trial of Shin Hyun-Seong, also known as Daniel Shin, began in the Seoul Southern District Court on July 10. The trial, brought about by the authorities, centers around allegations of financial crimes and the collapse of Terraform Labs’ UST. Shin is facing charges of fraud and violations of financial transaction regulations.
In March, Shin was charged with violations of the Aggravated Punishment of Specific Economic Crimes, Capital Markets, and Electronic Financial Transactions Acts. Additionally, they accused him of selling Luna tokens without disclosing his possession. The alleged illegal sales are estimated to have yielded approximately $106 million, which the authorities have seized.
Defense Requests More Time
During the first hearing, Shin’s defense team requested an extension of the trial preparation period. They argued that the extensive case files, comprising 48 volumes, contained technical jargon requiring the expertise of IT professionals and consultants’ expertise to represent Shin’s interests in court.
Judge Jang Seong-hoon granted the request, rescheduling the next hearing for August 28. The judge emphasized the importance of fairness and a thorough examination of the evidence in reaching this decision.
Notably, Shin was not present at the trial, as his attendance was not mandatory for the preliminary hearing. Despite the prosecution’s request for his arrest, the judge denied the motion, citing Shin’s low probability of fleeing the country or evading legal proceedings. In contrast, his colleague, Do Kwon, recently faced arrest at an airport in Montenegro when trying to travel with fraudulent documents.
However, prosecution counsel alleges that Shin played a central role in the collapse of the Terra ecosystem and Luna coins. They claim he manipulated transactions, engaged in false promotion, and disposed of coins shortly before the collapse, resulting in unjust profits totaling 376.9 billion won (approximately $289 million). Prosecutors suspect that Shin initiated the sale of LUNA tokens after the launch of the anchor protocol, earning profits of at least 154.1 billion won prior to the crash.
Furthermore, Shin is accused of deceiving investors by presenting the Chai Pay business as a blockchain-based enterprise capable of securing discount funds and reducing costs, resulting in unfair profits totaling 122.1 billion won, or about $94 million.
Ongoing Proceedings and Potential Extradition
Due to concerns about the impartiality of the chief judge, the court postponed the initial trial preparation date, scheduled for May 26. It’s worth noting that Do Kwon, the co-founder, is currently awaiting potential extradition either to South Korea or the United States. He is currently serving a four-month jail sentence in Montenegro.
As the trial unfolds, the court will review the extensive evidence and arguments put forth by both the prosecution and the defense. The primary aim is to uncover the truth behind the allegations against Daniel Shin and gain a deeper understanding of the events leading to the collapse of Terra and Luna cryptocurrencies.
Joseph Alalade is an expert Web3, crypto, and blockchain content writer and journalist. His persevering dedication to learning and understanding these complex subjects has equipped him with the ability to simplify them for any audience. Joseph’s expertise and passion for the industry make him a valuable asset for organizations seeking informative and engaging crypto-related content that drives results.
