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June 12, 2022 by Lipika Deka
Beleaguered CEO of Terraform labs Do Kwon took to Twitter to respond to FatMan’s claims alleging cashing out $2.7 billion from Terra [LUNA], UST in a span of a few months prior to the stablecoin fallout.
On June 9, multiple reports emerged of Terraform Labs employees confirming to the US Securities and Exchange Commission [SEC] that its co-founder Kwon was siphoning off nearly $80 million to secret wallets every month in the name of operating expenses.
As per a Korean report, SEC has received statements from Terraform employees that say “the funds flowed into dozens of cryptocurrency wallets” in the months leading to the collapse.
According to the article, this activity raised concerns about money laundering. One key informant also shared that Do Kwon had not received any official payment from the firm.
In a separate Bloomberg report, the SEC is currently investigating whether the marketing of the TerraUSD stablecoin violated federal investor-protection regulations before the dramatic debacle.
The SEC probe is confidential, and the details are not been released yet, an unidentified resource familiar with the matter revealed.
On the other hand, Terraform issued a statement saying that it was not aware of any such SEC investigation, leading to multiple speculations in the media.
Finally, on June 11, FatMan the self-proclaimed Terraform labs whistleblower posted a series of tweets doubling down on the cashing out allegations detailing the so-called mechanism employed by Do Kwon to drain liquidity out of the LUNA & UST system and into hard money like USDT.
Do Kwon insisted he only earned a nominal salary
Refuting the charges, Do Kwon insisted that for the past two years the only thing he has earned is a nominal cash salary from TFL, and deferred taking most of his founder’s tokens because he “didn’t need it and didn’t want to cause unnecessary finger-pointing of “he has too much”.
Further, the founder stated that he chose to remain silent despite mounting rumors of malicious intent because he didn’t want to seem like playing the victim and mentioned that he too lost in the crash.
Urging the community to stop spreading misinformation, he then said, “that just adds to the pain of everyone who has lost.”
