A former developer at Terraform Labs named Lee testified Monday that Kwon Do-hyeong and Shin Hyun-seung, the company’s co-founders, promoted the TerraUSD stablecoin as a potential payment option to investors, despite knowing local regulations prohibited such an offering, according to local media.

The testimony came during a witness questioning at a third trial for eight former members of Terraform Labs including Shin, local news outlet Chosun Ilbo reported. Former developer Lee’s full name was not disclosed due to South Korea’s privacy rules. 

Following the disastrous collapse of the Terra-Luna crypto project in 2022, South Korean prosecutors accused Kwon, Shin and Terraform Labs of defrauding investors by falsely promoting that Terra’s USD-pegged stablecoin could be utilized as a …