Former Terra developer provides testimony against Do Kwon in South Korean court, according to reports
A former developer at Terraform Labs, known only as Lee due to privacy rules in South Korea, testified on Monday that co-founders Kwon Do-hyeong and Shin Hyun-seung promoted the TerraUSD stablecoin as a potential payment option to investors, despite being aware of the local regulations prohibiting such offering. This testimony was given during the witness questioning at the third trial of eight former members of Terraform Labs, including Shin. The collapse of the Terra-Luna crypto project in 2022 led South Korean prosecutors to accuse Kwon, Shin, and Terraform Labs of defrauding investors by falsely advertising the usability of Terra’s USD-pegged stablecoin as a payment method.
Shin argued that regulators did not provide a clear stance on crypto payments and stated that he had left Terra two years before the project’s collapse, claiming no connection to the incident. However, the former developer, Lee, reportedly testified that Kwon acknowledged the limitations set by South Korean financial regulations for using TerraUSD as a payment method, indicating that Terra executives were aware of these restrictions. Shin’s defense team retaliated by contesting the accuracy of Lee’s testimony.
Meanwhile, former Terra CFO Han Chang-joon, a close associate of Kwon, was extradited from Montenegro to South Korea on Monday. He is expected to arrive in Seoul on Tuesday afternoon and will face investigation by local prosecutors. Han and Kwon were arrested in March last year at a Montenegrin airport for attempting to travel with forged documents. While Kwon remains in custody in Montenegro, the local authorities are still considering whether to extradite him to South Korea or the U.S.