Terra co-founder Daniel Shin blames ecosystem failure on Do Kwon’s management

2023-10-31 21:20

Daniel Shin, co-founder of TerraformLabs, appeared in court on Oct. 30 and denied all charges against him in connection with the 2022 collapse of the Terra Ecosystem. He instead laid blame on his associate Do Kwon’s “unreasonable” management practices of Anchor Protocol.

Shin distanced himself from the currently incarcerated Kwon, his lawyers claiming that he had terminated their association in 2020. Therefore, they argue, he can not be held liable for the subsequent failure of the digital asset’s ecosystem. Shin’s lawyer told the court:

“[Shin]parted ways with CEO Kwon for business purposes in 2020 … The cause of the coin plunge was the unreasonable operation of the Anchor Protocol conducted by CEO Kwon and external attacks. It has nothing to do with CEO Shin,

After several failed arrest attempts, Shin is now facing trial in Seoul for fraud, illegal fundraising, and violating capital market laws. However, he has denied all charges against him.

His former partner, Do Kwon, is serving a four-month jail term in Montenegro for traveling with forged documents. Authorities in South Korea and the United States have filed criminal charges against Kwon over his role in the collapse of UST.

Terra failure

Anchor Protocol was Terra’s lending borrowing platform. The protocol promised UST holders a 20% annual yield on the stablecoin holdings, leading to its massive growth and adoption.

UST was an innovative algorithmic stablecoin whose market capitalization peaked at more than $40 billion before suddenly crashing last year, resulting in a contagion that affected several crypto firms.

Following UST’s unexpected collapse, Kwon substantially raised Anchor’s protocol’s interest rate from the initially planned 3.6% to well over 20% in a last-minute decision.

On the other hand, Terraform Labs, the creator of the Terra blockchain, has consistently maintained that the failure of its ecosystem was due to third-party firms that held “short” positions against its digital assets, LUNA and UST.

The post Terra co-founder Daniel Shin blames ecosystem failure on Do Kwon’s management appeared first on CryptoSlate.

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