April 26, 2023 12:52
Prosecutors on Tuesday indicted Terraform Labs co-founder Shin Hyun-seong on charges of fraud in the spectacular collapse of the TerraUSD and Luna cryptocurrencies, which wiped out nearly W50 trillion in investors' money (US$1=W1,332).
Shin founded Terraform Labs with Do Kwon, who was arrested in Montenegro earlier this month.
Seven other Terraform Labs executives were also indicted on charges of fraud and illegal trade, and two others, including a former executive of social commerce site Tmon, were charged with breach of trust and receiving bribes.
Prosecutors believe Shin was the mastermind behind pegging the Terra to the dollar, using Luna to prop it up. But they said the project was unrealizable from the onset, and when the Terra proved unable to keep up with the dollar, Shin frantically traded in Luna to inflate transaction volume figures.
The scam netted the masterminds at least W462.9 billion in illegal profits, while Shin alone made W154.1 billion in profits from March 2021 until the crash in May last year.
Shin issued a statement denying the charges and saying he "left the company two years before the fallout."
"He voluntarily returned to Korea immediately after the collapse, and has been faithfully cooperating with the probe for over 10 months, hoping to contribute to fact finding," according to his lawyer.
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