Daniel Shin, co-founder of Terraform Labs, as well as nine other associates, have been indicted by South Korean authorities on violations of capital markets laws in relation to the devastating collapse of the TerraUSD stablecoin and sister coin LUNA in May 2022.
Bloomberg reported that around £148mln (US$184mln) worth of assets has been seized from the accused individuals.
Terraform Labs’ collapse caused a US$40bn collapse of the algorithmic stablecoin project and marked the first domino to fall in the two-trillion-dollar cryptocurrency rout of 2022.
Thousands of investors, some who had put their entire life savings into the project, saw their entire investment disappear overnight.
Eight of the individuals named by South Korean authorities, including Shin, have been charged with illegal trading, while two others face breach of trust charges.
Prosecutors called the project and the algorithms it ran on a "fabrication" from inception that caused “astronomical damage” for global investors.
“Shin has nothing to do with the Terra, Luna collapse as he left the company two years before the fallout,” Shin’s lawyers said in a statement, adding: “He voluntarily returned to South Korea immediately after the collapse, and has been faithfully cooperating with the probe for over 10 months, hoping to contribute to fact-finding.”
The indictments come exactly one month after the arrest of Terra kingpin Do Kwon in Montenegro, where he was hiding out as a fugitive.
Kwon had been wanted by South Korean and US authorities on charges of fraud and securities law violations relating to Terraform Labs collapse. He remains in a Montenegro prison awaiting possible extradition to either the US or South Korea.