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

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.

According to Twitter user @FatManTerra, Do Kwon the founder of $LUNA and $LUNC cashed out $2.7 billion over the beginning months of 2022.

This is in addition to his $80 million a month cashout that he on took.

The SEC have confirmed they are investigating $UST.

— unusual_whales (@unusual_whales) June 11, 2022

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:

🧵 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

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:

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”:

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.