Do Kwon Allegedly Moved $2.7B from Luna/UST

2022-06-21, 08:59

Reports spilling from the walls of Terraform Labs are that Do Kwon, the company's Co-founder and CEO- allegedly cashed out a staggering sum of $80 million monthly! This claim was reportedly placed on the table of the Securities and Exchange Commission (SEC), where key designers of Terraform Labs levelled serious allegations against the co-founder, amidst the SEC conducting surveys about the Labs' poor design structure.

Further allegations and reasons for suspicions against Do Kwon abound.

Keywords: Do Kwon, allegations, LUNA, Terraform Labs, SEC.,

The Security Exchange Commission (SEC)

The SEC did not immediately accede to comment on the allegations from Terraform Labs. Bloomberg reports that the commission is probing into several possible violations of federal investor protection regulations by Do Kwon.

Findings from the SEC point to the fact that about 100 billion won (or $78.1 billion) worth of company funds flowed out every month, a few months before the collapse of Luna. From the 9th of May to the 13th of the same month alone, $55 billion of market cap disappeared, triggering massive losses. JTBC reported that “the funds flowed into dozens of cryptocurrency wallets.”

From Terraform Labs

According to reports, key designers stated that they had foreshadowed the collapse of Luna – and Terraform Labs – and explicitly mentioned the associated dangers to Do Kwon, who blatantly ignored the warning signs. This allegedly led to the TerraUSD (UST), and Luna (the sister token) plummeting after they lost their peg to the dollar.

Key figures in the company are protesting against the aspersions cast against them. Daniel Shin, Terraform’s co-founder, stated that there was an “intention of deception”, further adding that the company simply wanted to transform the payment system using blockchain technology.

Do Kwon's Reaction

Do Kwon refuted the allegations, stating via his Twitter: “...this should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.” He further went ahead to claim that the allegations contradicted themselves. He also noted that the only thing he has earned from the company was a “nominal salary", one he claims to defer most times to avoid wandering fingers pointing at him.

Whistle-Blowers

Kwon's statement of denial against the allegations was in response to a certain FatManTerra who made allegations against Do based on intel from "whistle blowers" from Terraform Labs who had confided in him. FatManTerra had made several Twitter threads on how Kwon and his cohorts had successfully drained the firm while making it seem that the Crypto assets were liquidating.

FatManTerra on Twitter claimed that Kwon cashed out about $2.7 billion, with the aid of a program that was built to remedy the issue of accepting Degenbox, a non-interest-bearing token.

Recent Developments

- Luna and UST have been subsequently delisted from crypto exchanges to protect their customers.
- On the 8th of June, 2022, a Federal Appellate Court ordered that both Kwon and Terraform Labs comply with an SEC investigation, which entailed probing into the company's Mirror Protocol.
- Mirror protocol is known as a decentralized platform where the users can issue synthetic assets, which are essentially crypto tokens that monitor real-world assets like stocks.
- Kwon, on the other hand, claims that SEC has violated the rules of delivering subpoenas, in that the subpoena was meant to be delivered to his counsel, and not to him directly.
- Additionally, his counsel appealed to the court, stating that the company lacked a significant presence within the U.S markets.
- The ruling of the Federal Appellate Court noted that Kwon failed to give answers to inquiries relating to their digital assets and did not fully comply with the commission’s documents requests.

Conclusion

All allegations remain denied by Kwon. No evidence implicating Do Kwon has been provided by FatManTerra. Do Kwon's proposal of a new blockchain that would replace the existing one, and LUNA 2.0 to replace the existing version raises further suspicions.

Author: Gate.io Observer: M. Olatunji
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