- Terraform Labs CEO Do Kwon on recent allegations circulating in the community that he has cashed out a total of $2.7 billion in funds He did an explanation.
Surviving the storm from Terra’s downfall Terraform Labs CEO Do Kwon This week it has come under the SEC’s radar. Some lawyers at the regulatory agency believe Terra may have violated federal investor protection regulations.
In addition to all this, Kwon is accused by the South Korean press of committing various financial crimes, including tax evasion, fraud, and insider trading, and cashing out about $3 billion by the crypto community.
notorious after the recent collapse Terra (Luna) and TerraUSD (UST) Do Kwon, CEO and co-founder of Ecosystems, claimed that rumors that he had cashed out $80 million each month for nearly three years, totaling $2.7 billion, were false.
On June 11, Kwon’s Tether (USDT) Numerous unconfirmed reports have surfaced claiming he was involved in a move to drain liquidity in LUNA and UST prior to the crash to purchase US dollar-pegged stablecoins.
Rumors of Kwon cashing in on LUNA and UST reserves came after a Twitter account named FatManTerra, who identified himself as a Terra insider, shared in a thread possible details about how Kwon managed to drain funds while artificially maintaining liquidity with Terra influencers. had surfaced.
The Twitter user claimed that Kwon, with the help of Abracadabra’s borrowing protocol called Degenbox, has the potential to cash out billions worth of UST without even displacing the now-failed stablecoin’s peg.
🧵 Some of you thought $80m per month was bad. That’s nothing. Here’s how Do Kwon cashed out $2.7 billion (33 x $80m!) over the span of mere months thanks to Degenbox: the perfect mechanism to drain liquidity out of the LUNA & UST system and into hard money like USDT. (1/13)
— FatMan (@FatManTerra) June 11, 2022
However, the entrepreneur advised the crypto community to refrain from fueling the rumor until it is proven to be true, and said that in the past two years he has only received a salary in dollars. The South Korean entrepreneur, who is at the center of the controversy, claimed that he postponed acquiring most of his tokens as a founder because he wanted to avoid potential conflicts of interest.
“It goes without saying, but the claim that I made $2.7 billion from anything is completely false.”
Sharing his side of the story, Kwon stated that the rumor that emerged recently in the community that he had cashed out $80 million in the last month contradicted his claims that he held most of the LUNA assets purchased during the airdrop. In addition, Kwon reiterated that his income for the past two years has only been a cash salary from TerraForm Labs (TFL).
3/ To reiterate, for the last two years the only thing ive earned is a nominal cash salary from TFL, and deferred taking most of my founder’s tokens because a) didn’t need it and b) didn’t want to cause unnecessary finger pointing of “he has too much”
— Do Kwon 🌕 (@stablekwon) June 12, 2022
The cryptocurrency developer announced that he lost most of his own money during this crash, noting that spreading false news in the community increased the pain of LUNA investors, whose losses were huge. After routinely calling his critics on Twitter “poor”, he said he didn’t really care about money anymore and became the subject of more ridicule on Twitter.
“I didn’t say much because I didn’t want to play the victim role, but I lost most of what I had during the collapse. I’ve said that many times, but I don’t really care about money.”
Aren’t those on the Terra platform doing what they’re supposed to?
In the wake of Terra’s $60 billion collapse, some have criticized the platform’s failure to take responsibility and action. Lebanese-American statistician Nassim Taleb also recently stated that Kwon is more dangerous than swindler Bernie Madoff and called for the LUNA founder to be put behind bars to prevent him from starting other projects.
While it is unlikely that Kwon will face prison time, his country has come under intense scrutiny by authorities in South Korea and elsewhere. As mentioned above, the US, according to reports, the Securities and Exchange Commission has launched a new investigation into Terraform Labs.
“I knew from the beginning it would collapse, I warned Do Kwon”
It seems that what happened to the insiders of the project did not come as a surprise. B, a developer from Anchor Protocol, a Terra-based sub-ecosystem, allegedly previously warned Kwon of unrealistically high interest rates. Mr B said the platform was designed to offer an interest rate of 3.6 percent just to keep the Terra ecosystem stable, but just prior to release, this was changed to 20 percent:
“From the beginning I expected it to crash (I designed it), but it completely fell apart.”
The developer allegedly requested a reduction in interest rates from Kwon, but the request was apparently denied. Do Kwon was summoned to attend a parliamentary session in South Korea on the matter.
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Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, KoinFinans and the author of this content cannot be held responsible for personal investment decisions.