- Do Kwon has been implicated in witness testimony.
- The witness testified at the trial of a Terraform Labs co-founder.
- The witness statement comes as Do Kwon awaits an extradition decision in Montenegro.
A former Terraform Labs development team leader has told a South Korean court that Do Kwon and his co-founding partner Shin Hyun-seung promoted the TerraUSD stablecoin as a payment option despite knowing such an offering was “legally impossible.”
Do Kwon and Shin co-founded Terraform Labs in 2018. The company launched its native token LUNA in 2019 and its algorithmic stablecoin TerraUSD (UST) in 2020 before collapsing in May 2022. In September of the same year, a South Korean court issued an arrest warrant for Kwon and five others.
Do Kwon, Shin Implicated in Witness Testimony
According to a local media report, the developer, arraigned as a witness identified as “Mr. Lee,” told the 4th Criminal Division of the Seoul Southern District Court that he was aware of the Terra project being “legally impossible” while working at the company.
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When the prosecutor asked Lee how he learned about the illegal project, he stated that he “heard it through (Terraform Labs founder) Kwon Do-hyung.”
The developer further alleged that Do Kwon acknowledged that South Korean financial regulations barred TerraUSD from being used as a payment option via “Chai Pay,” implying that Terra executives were aware of the stablecoin’s limitations.
In response, the defense dismissed the witness’s statement as “not true,” arguing that Do Kwon and Shin “did not say that and, in fact, responded that they did not think so.”
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Meanwhile, while Shin’s trial is underway, Do Kwon is in custody in Montenegro. Do Kwon’s possible extradition will be decided before February 15, when his detention expires.
Read why Do Kwon’s former CFO is facing life in prison:
Do Kwon’s Former CFO Faces Life in Prison After Extradition
Stay updated on why Terraform Labs is seeking bankruptcy protection:
Terraform Labs Seeks Bankruptcy Protection as US Trial Nears
