South Korean prosecutors have discovered new proof alleging that Terra founder Do Kwon conspired with former Chai CEO Shin Hyun-Sung to deceive traders with pretend transactions.
Terraform Labs co-founder Kwon Do-Hyeong, a central determine within the collapse of the Terra and Luna tokens, allegedly conspired with ex-CEO of Chai Company Shin Hyun-Sung, to deceive traders with pretend transactions, based on a report by Yonhap Information Company.
The Seoul Southern District Prosecutors’ Workplace reportedly offered new proof to the court docket, revealing a Could 2019 chat between Kwon and Shin discussing the Chai fee app, which Terraform used to course of thousands and thousands of transactions for Korean customers.
Within the chat, Kwon informed Shin that he may “create pretend transactions that look actual,” including that the app may dilute the variety of pretend transactions because it grew, making them “indistinguishable,” as per the report. Shin agreed to the scheme, suggesting they need to “check it on a small scale and see what occurs.”
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Prosecutors argue this dialog demonstrates that Kwon and Shin supposed to control Terra-related operations to deceive traders from the challenge’s inception. Shin and his co-defendants, nevertheless, deny any fraudulent intent in court docket, attributing the Terra and Luna crash to Kwon’s failed administration and exterior assaults.
Following the Terra crash, the U.S. Securities and Trade Fee (SEC) filed a lawsuit, accusing Kwon and Terraform Labs of deceptive traders about Terra’s stability. Earlier in April, a jury in New York discovered Kwon responsible of fraud, resulting in a settlement the place Terraform Labs agreed to pay $4.47 billion in disgorgement and fines.
The Terraform Labs co-founder fled South Korea in April 2022, simply earlier than the collapse of Terra and Luna, and was arrested in Montenegro in March 2023 for passport fraud. He stays detained in Montenegro, with New York prosecutors having charged him with eight counts of securities fraud and different offenses.
Learn extra: Do Kwon’s attorneys once more attraction extradition determination