Terraform Labs Co-founder's Legal Defense Clarifies on Anchor Protocol Debacle

Published: October 31, 2023 at 10:04 am Updated: October 31, 2023 at 10:04 am

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In Brief

In court, Daniel Shin’s lawyer clarified Shin split from Do Kwon in 2020, attributing the currency’s decline to Kwon’s actions.

In a pivotal trial held at the Seoul Southern District Court, Daniel Shin‘s attorney emphatically distanced his client from the financial turmoil caused by the Luna Coin crash. The blame, he asserted, primarily rested with Do Kwon‘s mishandling of the Anchor Protocol and external attacks.

Daniel Shin, once partnered with Do Kwon in Terraform Labs, had ended their business association back in 2020, specifically due to corporate differences.

Last year’s Luna Coin crash resulted in a staggering loss of approximately 50 trillion won in market capitalization. One central figure, Shin Hyun-seong, former CEO of Chai Corporation, firmly rejected allegations that link him with the downfall during his initial court appearance.

Instead, the focal point of the blame turned towards Kwon Do-hyung, Terraform Labs’ current CEO. Shin’s legal counsel insisted the plunge was a direct consequence of Kwon’s questionable operation of the Anchor Protocol, combined with external factors – excluding any involvement from Shin.

What Happened With Anchor Protocol?

The Anchor Protocol, affiliated with Terraform Labs, presented itself as a lucrative virtual asset investment platform, pledging returns as high as 20% in tandem with Terraform Labs’ cryptocurrency, Terra.

One crucial argument made by Shin’s attorney was against the foundation of the prosecution’s probe. He emphasized that at the project’s inception, no regulatory framework in Korea barred the functioning of virtual asset payment services. This counters the prosecution’s standpoint that the Terra project had been inherently flawed due to impending regulatory hurdles.

Charges Against Shin Hyun-seong

The prosecution charges against CEO Shin Hyun-seong revolve around alleged insider trading. They posit that he profited significantly by minting coins while concealing foreknowledge of the impending downfall of Terra and Luna.

In the ensuing trial sessions, the court will unravel these complex layers of business decisions, partnerships, and alleged financial irregularities to ascertain the truth.

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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master’s degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

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