A former development team leader at Terraform Labs, identified as "Mr. Lee," has delivered critical testimony in a South Korean court, alleging that co-founders Do Kwon and Shin Hyun-seung knowingly promoted TerraUSD (UST) despite being aware of its legal impossibility.
Founded in 2018, Terraform Labs gained prominence with the launch of its native token, LUNA, in 2019. The introduction of TerraUSD (UST) in 2020 was a significant milestone for the company. However, Terraform Labs faced challenges and eventually collapsed in May 2022.
Mr. Lee's testimony revealed that he was aware of the legal limitations surrounding the Terra project during his tenure at Terraform Labs. He indicated that the project was considered "legally impossible" and attributed this knowledge to co-founder Kwon Do-hyung.
The defense denied the allegations, stating that Do Kwon and Shin Hyun-seung never acknowledged the legal limitations. They argued that the co-founders expressed a different viewpoint and did not believe the legal constraints applied.
While Shin Hyun-seung's trial is underway, Do Kwon remains in custody in Montenegro. A decision on Kwon's potential extradition is expected before February 15. The testimony has raised significant concerns about the conduct of the co-founders during their tenure at Terraform Labs.
If the court finds merit in Mr. Lee's testimony, it could lead to serious consequences for the co-founders, including criminal charges related to financial regulations. This case highlights the importance of adhering to legal guidelines within the cryptocurrency industry.
The allegations of promoting TerraUSD despite legal obstacles, if proven true, could tarnish the reputation of Terraform Labs and its co-founders, underscoring the need for transparency and compliance in the cryptocurrency sector.
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