South Korean prosecutors have confirmed that the case against Terraform Labs co-founder Daniel Shin will begin on May 26 in the Seoul Southern District Court.
The criminal case will involve seven other Terraform Labs associates for their roles in the project’s collapse. The defendants are charged with fraud and breaching certain provisions of South Korean capital markets laws, leading to losses running into tens of billions.
Shin is also charged with failing to disclose the existence of his pre-issued Luna tokens to early investors, netting over $100 million from the sale. Prosecutors allege that Shin promoted Luna as a payment mechanism in South Korea despite several warnings from financial regulators.
Ahead of his defense, Shin has reportedly recruited over 30 lawyers in a valiant attempt to beat the charges. Nearly a dozen attorneys are with a top-tier law firm with ex-prosecutors in their ranks as Shin maintains his innocence.
The bulk of Shin’s defense revolves around the fact that he severed ties with Terraform Labs in 2019 and has no knowledge of events leading to the implosions. For the charges of promoting Luna as a payment option, Shin argues that financial authorities “did not have a fixed position” on the legality of digital assets.
Previous attempts by law enforcement to obtain an arrest warrant against Shin fell through as the courts ruled that he did not pose a flight risk and was collaborating with investigators. The prosecution seized over $100 million belonging to Shin over fears that he would dispose of the assets.
Shortly after Terra’s collapse, Shin’s private residence and the premises of his new startup were raided by law enforcement for evidence linking him to the implosion.
The legal tussle between Shin and the prosecutors is expected to be highly publicized, given Shin’s family ties. His grandfather, Shin Jik-soo, served as a former Justice Minister for the country, while his uncle, Hong Seok-hyun, is the chairman of media giant JoongAng Holdings.
Kwon’s arrest fuels activity in South Korea
Kwon’s arrest in Montenegro injected new energy among South Korean prosecutors as they scrambled to end the 13-month investigation. In the weeks following his arrest, authorities uncovered and froze assets belonging to Kwon in South Korea in real estate, cars, and securities.
Prosecutors have stated that Kwon could land 40 years in prison for his role in Terra’s collapse if he faces trial in the country. Both South Korea and the U.S. are pushing for Kwon’s extradition, but it appears he could serve up to five years in a Montenegrin jail for possessing fake travel documents.
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