The co-founder of Terraform Labs, Daniel Shin, along with seven other former employees of Terra, faced their first preliminary hearing in South Korea on Monday, according to the Seoul Southern District Court. Shin was indicted on April 25 on a series of charges linked to the collapse of the Terra-Luna cryptocurrency project, including fraud. On the day of the indictment, Shin’s legal representatives refuted all the charges.

Shin is accused of contravening the Capital Markets Act, neglecting his duty, and embezzlement in relation to the Terra-Luna project, as per Seoul prosecutors. They claim that Shin deceived investors by endorsing the Terra stablecoin as a payment system, despite being aware that such services were illegal.

Shin, who did not attend the preliminary hearing, stated in an email response to Forkast on Monday that he had no comment on the matter.

The Terra-Luna stablecoin and cryptocurrency project of Terraform Labs, which was valued at $40 billion, collapsed in May of the previous year. Shin established the company in 2018 with Kwon Do-heyong, a computer science graduate from Stanford University. After the project’s failure, Kwon fled to Europe and is currently detained in Montenegro. He received a four-month jail sentence for attempting to travel through the country with a counterfeit passport.

Both the U.S. and South Korea have submitted extradition requests for Kwon, citing charges similar to those faced by Shin. Kwon has refuted all the charges against him. Despite Shin’s public indictment on April 25, prosecutors were unable to persuade the local court to issue an arrest warrant for Shin.

On the day of the indictment, Shin’s lawyers rejected all the accusations in an emailed statement, arguing that at the time of Terra’s launch, financial authorities did not have a definitive perspective on crypto as a payment system.