@WatcherGuru claimed that Terra employees told Securities and Exchange Commission (SEC) investigators that Do Kwon was withdrawing $80 million a month prior to the LUNA/UST collapse.
BREAKING: Terra staff reportedly confirmed to the SEC that Do Kwon cashed out $80 million in the month before $LUNA and $UST crash.
— Watcher.Guru (@WatcherGuru) June 9, 2022
It’s been a month since UST lost its dollar peg, resulting in a loss $60 billion. During this time, whistleblowers and internet detectives have uncovered a complex web of allegations of fraud and mismanagement.
These include allegations of involvement by well-known industry insiders, exploitation and cover-up of code vulnerabilities in the Mirror protocol, and allegations of money laundering.
Given the gravity of the allegations and the extent of the destruction that followed, it was only a matter of time before the authorities launched an investigation.
SEC Launches Terra Investigation
South Korean and US authorities are investigating the collapse of the Terra Classic ecosystem.
According to Financial TimesSouth Korean authorities are investigating parent company Terraform Labs on allegations of fraud. At the same time, the US Securities Regulator is investigating whether UST stablecoin marketing is violated Federal rules for the protection of investors.
“SEC attorneys are investigating whether Terraform Labs, the firm behind the coin, also known as UST, violated securities and investment product rules.”
Under U.S. securities law, virtual currency can be subject to the SEC if U.S. citizens have invested in the token to profit from the efforts of those managing the project.
Terraform Laboratories it said in a statement that they are not aware of any new SEC investigations other than Mirror protocol investigations.
“At this time, we are not aware of any SEC investigations into TerraUSD – we have not received such reports from the SEC and are not aware of any new investigations other than the Mirror protocol investigation.”
To the claim that Do Kwon was pumping out $80 million a month, crypto YouTuber Lark Davis commented that “LUNA’s rabbit hole is getting deep.”
Apparently, Do Kwon was cashing out 80 million a month and hiding it in a secret account ahead of the crash. $ just.
$moon the rabbit hole goes deep.
— Lark Davis (@TheCryptoLark) June 9, 2022
Meanwhile, @FatManTerra said the withdrawal of hundreds of millions of dollars is both a scam and an act that directly contributed to the depegging of the UST.
“As a reminder, Do Kwon giving himself hundreds of millions (“operating expenses”) is not just a scam – it actively exacerbated the crash as it removed critical liquidity from the Curve and LUNA order books (making it easier for UST to depeg and making it harder for the UST to catch up )“.
Founder of crypto consulting platform Eight, Michael van de Poppe compared Do Kwon to convicted con artist Bernie Madoff, saying, “Honestly, he deserves to go to jail.”
The fact that Do Kwon sent $80 million into his wallets.
Honestly, he deserves jail.
Many investors lose a lot of money and he just walks away with a big pile of money.
Even Madoff ended up in jail.
He deserves it too.
— Michael van de Poppe (@CryptoMichNL) June 9, 2022
Do Kwon responded to statements on social media on June 9 and said misinformation and lies are driving the narrative. He promised to make sure that reliable information gets there.
2/ There is a lot of misinformation and lies out there and we promise to do our part to ensure that as many of them as possible are correct.
A few tips to help us attract:
— Do Kwon 🌕 (@stablekwon) June 9, 2022
Credit : cryptoslate.com