Daniel Shin Blames Terraform Collapse on Do Kwon’s Management: Report

Daniel Shin, the co-founder of collapsed stablecoin issuer Terraform Labs, blamed former CEO Do Kwon for the company’s implosion in May 2022 at his trial, South Korean news platform Munawa Broadcasting Co. reported Monday.

Shin was indicted in April by South Korean authorities for his affiliation with the multibillion-dollar crypto enterprise and charged him with violating capital-markets law. His lawyer said at the time that Shin had left the company two years before the failure. His lawyers reiterated the departure during the trial in South Korea, saying he “parted ways” with co-founder Kwon in 2020, according to the report.

“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 Shin,” a lawyer reportedly said.

Anchor protocol was a lending platform built on Terra that allowed investors to earn high yields on their deposits and borrow against their crypto holdings. After the terraUSD (UST) stablecoin lost its peg to the U.S. dollar ahead of the collapse, deposits on Anchor took a plunge, contributing further to the crisis.

While Shin is facing trial in South Korea, Kwon is jailed in Montenegro for possession of falsified documents. After his term is served in the European country, Kwon faces extradition to South Korea or the U.S.