Do Kwon accused of money laundering
By now you have heard of the debacle that was Luna and Terraform Labs. For a few weeks, the unpegging of the stable coin and the resulting mega loss of money were news. The amount of money people have lost has been debilitating for some. Many came out of the situation hurt, broken, and lost..except for Do Kwon.
The plot thickens
Let’s start with this tweet by “FatManTerra” via Twitter that also exposes some of the moves of Do Kwon that seem unethical, to say the least. The thread above speaks on mirror protocol and wormhole and makes some pretty deep implications into the actions and dealings of both, not painted in a very good light, to say the least.
The tweets allege that a user with vast amounts of money and liquidity provider contracts scattered MIR ( mirror protocol) tokens across a vast number of wallets just to pull off the illusion of decentralization. The tweet alleges that the mirror protocol is a fake protocol created by Terraform Labs, which is owned by Do Kwon, and that the main purpose of the protocol is to manipulate governance and betray those that purchase in retail.
The writer “FatManTerra” used Etherscan to dive deep into transactions made on those multiple wallets and traced them back to the Terra founder. He continued his description in the thread.
The writer uncovered one specific wallet that used the Mirror Protocol yield-farming smart contracts. The wallet was then traced using those contracts and found to be one of the top trading wallets per CoinMarketCap data. The wallet was found to be part of the Terra wormhole infrastructure and a Mirror Protocol liquidity pool.
The situation gets even more sinister when looking into the situation and discovering that multiple wallets were then used in a bridging of tokens across the wormhole. This bridging of tokens included transferring assets from ETH to Terra, a total in purchases of $750 million tranches of TerraUSD, and then having those tokens be distributed among the multiple wallets.
The whistleblower FatManTerra then goes on to discuss how the funds switch to a DAO of which Do Kwon is an advisor. All of these allegations of course come with the reminder for you to do your own research but they definitely do not paint Kwon in a good light, especially after the debacle that has been LUNA.
The hole does not get any more shallow, as we continue to dive into the fall of Luna more comes to light on the workings of Kwon and certain things that just don’t seem to add up for many.
Reportedly the company is now being investigated for money laundering, with a reported $4.8 million suspected to be laundered through a Korean shell company. This all seems to be part of a scheme that involved K’- a “blockchain consulting firm” based in Seoul. Workers of Terraform Labs confirm that Kwon did have ties with the company and that earlier floorplans of the company had the name Terra on them, it was then discovered that Terra did indeed have $4.8 million transferred to K’ and that amount was reported as an “other” expense. Again whistleblower FatManTerra was there to divulge all of the information via a thread on Twitter.
purportedly the Korean tax officials levied a fine on Terraform Labs for tax evasion after noticing suspicious transfers. It would seem that the story of Terra is far from over and as we dig deeper into how things have changed for Kwon and the many holders of Luna, it seems as if things can only get worse.
As with most people who have been bamboozled one would ask if Do Kwon will face any type of retribution for his crimes if they are indeed his. Do Kwon indeed has a knack for salesmanship, he seems to be able to sell water to the Atlantians and has a real skill for marketing. He was able to raise $207 million in funding for Terraform, he was able to create a semi-cult-like community with his “LUNAtics” and inspired many others.
Though he was so inspiring and had the bravado he showed off, there is no doubt that something was rotten in Denmark, and as more negative news comes to light about Kwon and Terraform labs one may want to know how he may be getting away with all of this without jail time.
The first thing we need to realize is that Kwon is in Korea, not the United States. In Asia, serious offenses can be swept under the rug with the right amount of money. In Taiwan 2014a man blatantly stabbed a police officer to death outside of a nightclub only to have that man make bail and pay a fee. The situation was swept under the rug and everyone went on with their lives.
America does not punish someone for being a terrible CEO with utterly disastrous judgment skills. The prosecution of any such criminal case would have to prove the CEO was complicit with his associates in purposely committing fraud. This is hard to prove since it involves proving intention.
The process would involve tons of documentation just to try to pull together a case against Kwon by proving he was intentionally scamming the multitude of people that lost money on LUNA. The only hope at this point is to find what is called a “smoking gun” or the definitive proof that shows the crime and the criminal in the exact same place at the exact same time with the exact intention of doing the crime. The road to criminal charges against Kwon would be very long and thus the chances of jail time are very slim at this moment in time.
This leads to civil law which does not have such a high burden of proof and is based on the preponderance of evidence but what does that mean? What does the preponderance of evidence mean? Simply put, it means that the odds are in favor of one side or another. In terms of evidence, that means that the party with more evidence is more likely to win than the other party. In legal proceedings, it’s used to evaluate whether there is enough proof to convict someone of a crime. If there isn’t enough proof, then the defendant will be found not guilty; if there is enough evidence, then the defendant will be found guilty.
Again this leads to finding enough evidence to show that Kwon was dishonest and unscrupulous with his dealings. The main flow of the situation seems that punishment for Kwon will come in the form of civil, regulatory, or administrative dealings. Civil consequences mean fines, regulations, or lawsuits from users who lost on the crash of $LUNA. Some other types of retribution could be injunctions and disgorgement which means returning gains made on the platform. The amount that would be returned would definitely be extremely large and shocking.
Seoul has already ordered Kwon to pay $80 million in back taxes. A special division of the tax bureau in Seoul known as the “Yeouido Grim Reaper” has been resurrected to probe into Terra. The point being made is that more jurisdiction is available in Asia than in America.
Even with all the bad press Kwon still seems able to sell his products without interruption or anyone else questioning his motives. Recently he has decided to create a new token and the followers voted in favor of the plan and thus in favor of reviving the failed system he created before. With Luna 2.0 on the horizon, one may question if this is sincerely a plan to build a project and make something greater or will be an even greater collapse than before. One wise saying states “when someone shows you who they really are — believe it” Have we seen the real Do Kwon or is there even more to this than meets the eye?
The opinions expressed by some of the writers in this article do not represent all of the members of MetaFi or Solanews. This article though based on facts is based on facts that have been reviewed and deemed worthy for news. As usual, the best advice is to do your own research on any topic and make your own decisions.