Summary
Former developer Lee testified that the co-founders of Terraform Labs, Kwon Do-hyeong and Shin Hyun-seung, promoted the TerraUSD stablecoin as a potential payment option to investors, despite knowing it violated local regulations. This testimony came during a trial for eight former members of Terraform Labs, who are accused of defrauding investors. Shin argued that regulators did not have a clear stance on using crypto as a payment method and claimed to have left Terra two years before the collapse. Lee testified that Kwon acknowledged the limitations of using TerraUSD as a payment method. Former Terra CFO Han Chang-joon, a key associate of Kwon, was extradited from Montenegro to South Korea and will face investigation from local prosecutors. Kwon remains in custody in Montenegro awaiting a decision on extradition.
Key Points
1. A former developer at Terraform Labs named Lee testified that the company’s co-founders, Kwon Do-hyeong and Shin Hyun-seung, promoted the TerraUSD stablecoin as a potential payment option to investors, despite knowing local regulations prohibited such an offering.
2. South Korean prosecutors have accused Kwon, Shin, and Terraform Labs of defrauding investors by falsely promoting Terra’s USD-pegged stablecoin as a payment measure. This accusation comes after the disastrous collapse of the Terra-Luna crypto project in 2022.
3. The former developer, Lee, testified that Kwon acknowledged South Korean financial regulations prevented TerraUSD from being used as a payment method, indicating that Terra executives were aware of the stablecoin’s limitations. However, Shin’s defense team disputed this testimony, claiming it was false.
Meanwhile, former Terra CFO Han Chang-joon, a key associate of Kwon, was extradited from Montenegro to South Korea on Monday. Han is expected to face investigation from local prosecutors upon his arrival in Seoul.