The rumor emerged after a @FatManTerra Twitter thread shared alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining liquidity.
Do Kwon, the CEO, and co-founder of the infamous Terra (LUNA) and TerraUSD (UST) ecosystems, refuted claims that he had been paid $80 million every month for nearly three years.
Numerous unconfirmed reports surfaced on June 11, claiming Kwon’s involvement in draining liquidity from LUNA and UST before the drop to buy US dollar stablecoin like Tether (USDT).
Rumors about Kwon pulling out LUNA and UST reserves surfaced after a @FatManTerra Twitter thread shared alleged details about how Kwon, along with Terra influencers, managed to drain the funds while artificially maintaining liquidity.
The first post by @FatManTerra reads, “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.”
Kwon’s Reaction
The businessman advised the cryptocurrency community to stay away from feeding the rumor until it is proven true:
“This should be obvious, but the claim that I cashed in $2.7 billion of anything is categorically false.”
Sharing his side of the story, Kwon stated that the recent rumor that he had been paid $80 million a month contradicts claims that he still retains most of his LUNA stakes, acquired during the airdrop. Additionally, Kwon reiterated that his income for the past two years has been solely a cash salary from TerraForm Labs (TFL).
On Twitter, Kwon posted that, “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.”
Kwon told the community that “spreading the falsehood” adds to the pain of all LUNA investors, noting that, “I haven’t said much because I don’t want to seem like I’m playing the victim, but I also lost most of what I had in the crash. I’ve said it many times, but I don’t really care much about the money.”
Kwon Had Been Warned
Mr. B, a developer of Anchor Protocol, a sub-ecosystem centered on Terra, reportedly warned Kwon about unrealistically high-interest rates. Mr. B said that the platform was designed to only offer a 3.6% interest rate to keep the Terra ecosystem stable, but it was changed to 20% just before launch:
“I thought it was going to collapse from the beginning (I designed it), but it collapsed 100%,” Mr. B said.
The developer reportedly suggested Kwon lower interest rates, but the request was rejected. Do Kwon has been summoned to attend a parliamentary hearing on the matter in South Korea in mid-May.
About this case, it is worth remembering that, according to legal documents, Terraform Labs co-founder dissolved two of the entity’s locations in South Korea, as well as Terraform Labs Korea, just prior to the LUNA and UST collapse. Although the decision to dissolve the offices was made during an April 30 shareholder meeting, the timing raised eyebrows within the cryptocurrency community.
By Audy Castaneda
