Prosecutors: "Shin Hyun-sung and others knew of Terra's design flaws before issuance, earning an average profit of 40 billion won"

"Warning of Crash Risk Ignored Internal Opinions"
"Arrest Warrants Requested: Shin Representative and 7 Others Average 40 Billion Won Profit"

Regarding the 'Terra·Luna' crash incident, the prosecution confirmed that Shin Hyun-sung, co-founder of Terraform Labs, who had an arrest warrant issued, along with other related parties, were aware of the risk of the crash but still invested directly, inflating the trading volume and earning an average selling profit of 40 billion KRW.
[Image source=Yonhap News]

[Asia Economy Reporter Oh Gyumin] The prosecution has confirmed that Shin Hyunseong, co-founder of Terraform Labs, who has had an arrest warrant requested in connection with the ‘Terra·Luna’ crash incident, along with other related parties, knowingly invested despite the risk of the crash, inflated trading volumes, and earned an average selling profit of 40 billion KRW.

The Seoul Southern District Prosecutors’ Office Joint Investigation Team on Financial and Securities Crimes (Chief Dan Seonghan) and the Financial Investigation Division 2 (Chief Prosecutor Chae Heeman) reportedly included these details in the arrest warrant request for eight individuals, including CEO Kwon Do-hyung and Shin Hyunseong, the general representative of Chai Corporation who co-founded Terraform Labs with Kwon.

The prosecution believes that CEO Kwon and CEO Shin ignored internal warnings about the simultaneous crash risk of Terra and Luna and proceeded with issuance. They also judged that Terraform Labs used its funds to buy Terra and Luna, inflated trading volumes, and lured general investors. The prosecution estimates that the profits earned by Shin and seven other related parties range from a minimum of 1 billion KRW to a maximum of 80 billion KRW, with Shin reportedly gaining profits in the 140 billion KRW range.

In response, CEO Shin’s side explained that he had not been involved in Terraform Labs’ management since 2020 and only steadily liquidated the remaining holdings, denying that he earned 140 billion KRW in profits. Additionally, Shin’s lawyer argued, “It was launched after verification by experts and domestic and international investors,” and “More than two years after the launch, many experts believe that abnormal operations such as the launch of the high-interest negative margin Anchor Protocol and the linkage between Anchor and derivatives caused the crash.”

Meanwhile, the Seoul Southern District Court will hold a pre-arrest detention hearing (warrant substantive examination) for these individuals at 10:30 a.m. on the 2nd.

This content was produced with the assistance of AI translation services.