Last Updated on October 31, 2023 by Bitfinsider
During his trial, Daniel Shin, the co-founder of the defunct stablecoin issuer Terraform Labs, attributed the company’s collapse in May 2022 on former CEO Do Kwon, according to a report published on Monday by Munawa Broadcasting Co. in South Korea.
Due to Shin’s involvement in the multibillion-dollar cryptocurrency business, South Korean authorities indicted him in April and accused him of breaking capital-markets laws. At the time, Shin’s attorney stated that the company had failed two years prior to Shin’s departure. During the South Korean trial, his attorneys reaffirmed the separation, stating that he “parted ways” with co-founder Kwon in 2020, as per the report.
“External attacks and CEO Kwon’s irrational adoption of the Anchor Protocol were the root causes of the coin collapse. According to reports, a lawyer stated that it is unrelated to Shin.
A lending mechanism called Anchor Protocol was developed on Terra to enable investors to borrow money against their cryptocurrency holdings and receive high rates on their deposits. Prior to the collapse, the terraUSD (UST) stablecoin lost its peg to the US dollar, which caused deposits on Anchor to plummet and exacerbated the problem.
While Kwon is imprisoned in Montenegro for possessing forged documents, Shin is on trial in South Korea. Kwon may be extradited to the United States or South Korea upon the completion of his sentence in the European nation.
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