Do Kwon Flatly Denies Cashing out $2.7 Billion Before Terra Collapse

Terra Do Kwon

Controversial Terra (LUNA) blockchain founder Do Kwon has taken to social media to refute the recent allegations that he cashed out $2.7 billion before the catastrophic end of the $40 billion valued blockchain network. 

The TerraLab CEO classified the claims as “categorically false” and stated that the only funds he had received from the platform in the past two years were nominal wages paid by the TFL. He also mentioned that he deferred taking most of his founder’s tokens because he didn’t want to be accused of having too much. 

Do Kwon $2.7 billion cash out claims

Popular Twitter user FatManTerra on Saturday alleged that Do Kwon cashed out billions of dollars that led to the depegging of UST from its U.S dollar value and crashing of its sister token, LUNA, earlier last month. 

According to the tweets, the South Korean billionaire CEO moved $2.7 billion worth of UST from the Terra ecosystem through the help of Degenbox, a DeFi lending protocol based on the Abracadabra ecosystem. 

FatMan Terra explained that the borrowing protocol allows users to create looping mechanisms on stablecoin buys. Users can stake collateral to buy UST, put it into Anchor, then use the staked UST (aUST) to borrow more UST, put it into Anchor once again, and so forth – a loop.

He noted that Degenbox provided the perfect route for Do Kwon to drain liquidity out of the UST algorithmic stablecoin and its governance token LUNA into real hard money like USDT and USDC. 

He also mentioned that Do Kwon knew that removing $2 billion worth of LUNA for USD would cause a significant break in the market. 

More Claims

A few hours after Do Kwon’s refutation, Fatman Tera came up with more claims stating that Do Kwon voted on his proposal. 

According to the latest discovery, the Twitter user unveiled a wallet address with $20 million worth of LUNA airdrop used to vote for proposals on the Terra ecosystem. 

“Caught. A “mystery” wallet with a 20M LUNA airdrop that was voting on Do’s own proposal – delegating to North Star, insider trading ASTRO, etc. – has been officially confirmed that it belongs to Do Kwon himself.”

Notably, Terra’s Do Kwon is reportedly being investigated by the United States Securities and Exchange Commission (SEC), while attempts to launch Terra 2.0 have been relatively unsuccessful.

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