Terraform Labs Ex-CFO Arrested In South Korea: Report

Key Points:

• Terraform Labs Ex-CFO arrested for fraudulent marketing of Terra stablecoins and violations of several financial acts.
• The prosecution accuses Han and associates of deceiving investors with a fictitious ‘Terra Project’ and violating public offering regulations by selling Luna Coins without a securities report.

According to a local article, Han Chang-joon, Terraform Labs Ex-CFO arrested and extradited to South Korea. He was accused of fraud and misleading investors.

Han Chang-joon, the former Chief Financial Officer of Terraform Labs, was arrested by the Seoul Southern District Prosecutor’s Office on charges of fraudulent marketing of Terra stablecoins, leading to 53.6 billion won (around US$40 million) in profits.

What Led to the Terraform Labs Ex-CFO Arrest?

The arrest was part of an interrogation process led by Chief Judge Kim Ji-sook of the Seoul Southern District Court. Han is suspected of violating the Capital Markets Act, Specific Economic Crimes Aggravation Punishment Act, and Electronic Financial Transactions Act.

According to the prosecution, Han and his associates, including Do-hyeong Kwon, are accused of using deceptive means such as continuous false publicity and transaction manipulation to mislead investors globally.

They made it appear that the ‘Terra Project’ was successfully progressing, despite it being a fictitious project unattainable from the start.

Readmore: Do Kwon Extradition Twist: Montenegro Court Now Appeals Court Cancels

Falsified Progress and Violations of Financial Regulations

Moreover, Han was alleged to have violated public offering regulations on securities offering and sales by selling Luna Coins without submitting a securities report.

He was also accused of leaking approximately 100 million electronic financial payment information of Chai Pay customers by recording them on the Terra blockchain without consent.

Han, along with Kwon, left Korea in April 2022, right before the collapse of Terra and Luna. After his arrest in Montenegro on March 23 last year, Han was extradited to South Korea on February 5.