Claims Surface of Do Kwon Draining $80 Million a Month Before Terra Collapse

June 13, 2022, 2:35 PM AEST - 2 weeks ago

Terra Labs’ CEO Do Kwon has struggled to stay away from headlines over the past few months and this past weekend was no different, as explosive claims emerged that he had drained US$80 million a month prior to the infamous LUNA collapse.

Kwon Accused of Rugging LUNA Holders

The claim first appeared on Twitter in a lengthy thread by self-appointed Terra sleuth FatManTerra. In a lengthy exposé, he shared how the Terra Labs CEO, together with a slew of influencers, managed to drain US$80 million a month while artificially maintaining the liquidity. In fact, he suggests that Kwon had, until the collapse of Terra, been cashing out US$80 million every month for almost three years.

The report, which surfaced this past weekend, claims that Kwon drained liquidity out of Luna Classic (LUNC) and TerraUSD Classic (USTC) before the crash, and prior to purchasing Tether (USDT).

FatManTerra then proceeded to outline the mechanism as to how this was achieved:

Kwon Plays Innocent

Kwon has denied the accusations, saying:

This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.

Do Kwon, CEO and founder, Terra Labs, via Twitter

Kwon, who at the time of LUNA’s collapse claimed to be “heartbroken”, suggested that the rumours of him cashing out “clearly” contradicted claims that he still holds most of his LUNA holdings, obtained during the airdrop. He added 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’.

Do Kwon, CEO and founder, Terra Labs, via Twitter

Not finished there, Kwon told the community that “spreading falsehood” only added to the pain of all LUNA investors:

I didn’t say much because I don’t want to seem like playing victim, but I lost most of what I had in the crash too. I’ve said this multiple times but I really don’t care about money much.

Do Kwon, CEO, Terra Labs

Poor to Blame for Being Poor

It’s difficult to take Kwon’s claims seriously that he “doesn’t care about money much”, especially in light of his penchant for labelling his critics as “poor”:

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Selection of Kwon comments re “poor”. Source: @soy_eth
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Whether the allegations are true or not, Kwon evidently has a long way to go in order to regain credibility and trust within the crypto community. With a class-action lawsuit pending and SEC investigation under way, Kwon looks set to remain in the spotlight for now, albeit for all the wrong reasons.

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