The trial of Terraform Labs co-founder Shin Hyun-Seong and seven others has begun in Seoul, South Korea. Shin is accused of defrauding investors, and the question of whether Luna is a security is also being addressed. Shin, who left Terraform in 2020, claims that the company’s bankruptcy was due to the unreasonable operation of the Anchor Protocol and external attacks by Do-hyung Kwon. The defendants face multiple charges under various laws, including the Information Act. The prosecutor argues that the defendants took advantage of investors’ limited access to information and understanding of it. The defense disputes the prosecutor’s claim that a business using virtual assets as a payment method cannot be established, stating that there were no regulations on using virtual assets for payment when Terraform was founded. The prosecution references the SEC case against Ripple as the basis for several charges against Terraform, but the defense argues that American law does not apply in South Korea. The defense also asserts that virtual assets do not fall under the category of financial products (securities) according to the government’s announcements since 2017. In February, the SEC sued Terraform and Kwon for fraud. Shin has been summoned by Korean prosecutors for an investigation into insider trading, price manipulation, and breach of duty to Chai customers. Prosecutors allege that Shin illegally cashed out over $100 million from LUNA in violation of local securities laws. In November 2022, South Korean authorities seized 140 billion won from Shin, claiming that he sold Luna coins knowing their value would fall. Defense lawyers deny this charge. Unlike co-founder Do Kwon, Shin remained in South Korea after the collapse of Terraform Labs. He made his first court appearance in November 2022 and was indicted on fraud charges in April. South Korea has issued an arrest warrant for Kwon, who is currently in Montenegro.

This News Article was automatically generated by Bob the Bot (AI)

Information	Details
Geography	Asia
Countries
Sentiment	negative
Relevance Score	1
People	Do-hyung Kwon, Shin Hyun-Seong, Daniel Shin, None
Companies	Ripple, Terraform Labs, Anchor Protocol, United States Securities and Exchange Commission (SEC), Chai
Currencies	Terra Luna Classic
Securities	None