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Former Terraform Labs Chief Financial Officer, CFO Han Chang-joon, has been arraigned in South Korea on charges related to fraudulent marketing practices involving the TerraUSD stablecoin. Han is accused of illicitly profiting from the marketing of Terra, amounting to approximately 53.6 billion Korean won (approximately $40 million).
Shortly after the arrest, he was taken into custody by the South Korean authorities, according to the news agency<a href="https://www.newsis.com/view/?id=NISX20240208_0002621688&amp;cID=10201&amp;pID=10200" rel="noopener noreferrer nofollow"> Newsis in South Korea</a> with the court concerned about his possible flight risk.
Han’s arrest follows his<a href="https://thecoinrise.com/terraform-labs-cfo-extradited-to-south-korea-from-montenegro/" rel="noopener noreferrer nofollow"> extradition from Montenegro</a>, where he was apprehended in March last year while attempting to travel with forged documents. He was apprehended alongside Han, Terraform Labs co-founder Kwon Do-hyeong, also known as Do Kwon. Do Kwon was arrested under similar circumstances as well.
<h2 id="b-prosecutor-s-b-b-allegation-against-terraform-labs-cfo-b">Prosecutor’s Allegation against Terraform Labs CFO</h2>
Seoul prosecutors allege that Han was involved in the fraudulent promotion of cryptocurrencies, particularly Terra, by falsely marketing it as a viable real-world payment option. Despite this, a former Terra developer testified during a trial that executive members of Terraform Labs were aware of regulatory restrictions preventing Terra’s use as a payment method.
However, <a href="https://thecoinrise.com/south-korea-prosecutors-to-indict-terra-co-founder-daniel-shin/" rel="noopener noreferrer nofollow">Terra co-founder Shin Hyun-seung</a> argued that regulatory clarity on cryptocurrency payments was lacking. He maintained the organization has nothing to hide and has operated with an extremely high bar of integrity,
<h2 id="b-accusations-and-legal-proceedings-b">Accusations and Legal Proceedings</h2>
In addition to the fraudulent marketing charges, Han faces accusations of selling Luna cryptocurrency without proper securities registration, as well as leaking financial information records of Chai Pay customers to the Terra blockchain. Chai Pay is a payments company associated with Terra co-founder Shin Hyun-seung.
Meanwhile, Kwon Do-hyeong remains in custody in Montenegro, with local authorities deliberating on whether to extradite him to the United States or South Korea. His detention period is expected to conclude on February 15. <a href="https://thecoinrise.com/illegal-assets-of-do-kwon-worth-26m-seized-by-swiss-authorities/" rel="noopener noreferrer nofollow">The assets of Do Kwon, valued at $26 million, or 34 billion won</a>, including Bitcoin, were frozen by Swiss prosecutors, according to reports in June 2023 from the Korean media.
<h2 id="b-investigations-and-future-implications-for-crypto-b">Investigations and Future Implications for Crypto</h2>
The Seoul Southern District Prosecutor’s Office has yet to provide further comments on the matter. The arrests of Han Chang-joon and Kwon Do-hyeong highlight the increasing scrutiny and legal challenges faced by individuals and companies operating in the cryptocurrency space.
Mr. Kwon’s extradition has been requested by both the US and the Korean governments, and an extradition trial is in progress. This case also underscores the importance of regulatory compliance and transparency in cryptocurrency marketing and operations, as authorities worldwide continue to address potential fraudulent activities and protect investors.
The post <a href="https://thecoinrise.com/terraform-labs-cfo-arraigned-for-fraudulent-marketing/" rel="noopener noreferrer nofollow">Terraform Labs CFO Arraigned for Fraudulent Marketing</a> appeared first on <a href="https://thecoinrise.com" rel="noopener noreferrer nofollow">Latest News and Insights on Blockchain, Cryptocurrency, and Investing</a>.

Terraform Labs CFO Arraigned for Fraudulent Marketing

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