A former Terraform Labs developer testified that Shin Hyun-sung, former CEO of Chai Corporation, and Do Kwon, former CEO of Terraform Labs, acknowledged that the Terra project wouldn’t function as publicly advertised.
A local report stated Shin and eight others were accused of breaching the Capital Market Act. A witness, identified as ‘Mr. Lee’ was a crucial witness who saw the inner workings of the firm before its downfall.
Terraform Labs Developer Makes Strong Claims
According to a recent local report, Lee revealed his awareness of the legal hurdles surrounding the Terra project. He reportedly admitted that it was impossible to use Terra for payments.
Lee worked as a developer at Terraform Labs. However, he disclosed that he obtained this information through Terraform Labs’ founder, Do Kwon.
Kwon and Shin deceived investors by pretending that all transactions from the Chai payment system were being recorded on the Terra blockchain when, in fact, they weren’t.
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Additionally, Mr. Lee’s recent testimony cast doubt on the operational framework of the Terra project.
Terraform Labs hinged on using Terra, a coin pegged to traditional assets like the dollar, as a virtual currency akin to physical money through the ‘Chai Pay’ system.
The subsequent rise in the value of the blockchain’s native Luna (now LUNC), tied to Terra, was reported to generate profits.
At the time of publication, LUNC’s price stands at $0.00010910.
Terraform Labs Developer Challenged
In response, Shin’s defense counsel challenged Mr. Lee’s claims. He disputed the prosecution that Shin and Kwon were aware of the
“Impossibility of Terra payment utilization.”
They recalled a different version of events, suggesting Shin and Kwon had not acknowledged this limitation.
However, the prosecution alleges that Shin colluded with Kwon and others to falsely promote the ‘Terra project.’
Meanwhile, they specified this was over a timeline from July 2018 to May 2022, employing illicit methods to realize gains.
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