On Monday, a former developer from #Terraform Labs named Lee testified that Kwon Do-hyeong and Shin Hyun-seung, co-founders of the company, promoted #TerraUSD stablecoins as a potential payment option for investors, even though they were aware that local regulations prohibited such an offering, according to local media reports.

Testimony During a Court Hearing

The testimony was presented during a witness's examination in the third legal case involving eight former members of Terraform Labs, including Shin, as reported by the local news channel Chosun Ilbo. The full name of the former developer Lee was not disclosed due to South Korea's privacy protection rules.

After the catastrophic collapse of the Terra-Luna #crypto project in 2022, South Korean prosecutors accused Kwon, Shin, and Terraform Labs of deceiving investors by falsely promoting that Terra stablecoins pegged to the USD could be used as a means of payment.

However, at that time, Shin claimed that regulators had not taken a clear stance on the use of cryptocurrencies as a payment method. Shin also stated that he had left Terra two years before the collapse and had no connection to the debacle.

Lee, the former developer, allegedly testified that Kwon had stated that South Korean financial regulations prohibited the use of TerraUSD as a payment method, suggesting that Terra's managers were aware of the stablecoin's limitations. In response, Shin's defense team argued that such testimony was false.

Meanwhile, on Monday, the former financial director of Terra, Han Chang-joon, a key associate of Kwon, was extradited from Montenegro to South Korea. It is expected that Han will arrive in Seoul on Tuesday afternoon in Asia and subsequently face an investigation by local prosecutors, as reported by the local news portal Aju Business Daily.

In March of last year, Han and Kwon were arrested at the Montenegrin airport for attempting to travel with counterfeit documents. Kwon remains in custody in Montenegro as local authorities continue to consider whether to extradite him to South Korea or the USA.

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