Terraform Labs Co-founder Dismisses Allegations of Transaction Manipulation on Terra Blockchain
Summary:
Do Kwon, Terraform Labs co-founder, has disputed the legitimacy of Slack messages brought as evidence by the SEC. The messages show Kwon allegedly conspired to manipulate transactions on the Terra blockchain for attracting investment. Asserting these were taken out of context, Kwon says they discussed staking LUNA tokens and facilitating LUNA wallet transactions, not creating fraudulent transactions. His lawyers have also pushed back against the SEC request for extradition to the US in conjunction with the Terra ecosystem collapse, declaring it as "impossible" due to his current detainment in Montenegro.
In a recent development, Do Kwon, co-founder of Terraform Labs, has challenged the credibility of Slack messages used as proof by the United States Securities and Exchange Commission (SEC), which pertain to conversations he shared with fellow co-founder, Daniel Shin on manipulating transactions on the Terra blockchain to lure investors. The SEC has produced the Slack dialogue dated from September 2019 as part of its court document.
The communication report suggests a strategy discussion between Shin and Kwon aimed at bolstering investor interest in the Terra blockchain. Herein, Kwon hints at engineering transactions to present an enhanced image stating, “I can just create fake transactions that look real.”
Kwon further details that these manipulated transactions would yield fees and could be phased out over time as Chai grows. Moreover, he seems to plan a pact of silence with Shin, stating, "I wont tell if you wont." He further states that proving the fraudulent tactic will be a daunting task.
He adds, “All the power to those that can prove its fake,” implying his full effort to keep the scheme hidden by ensuring it’s undetectable.
Despite the damning evidence, Kwon dismisses it, alleging it has been quoted out of context. His counterargument asserts that his conversation with Shin centered around possibilities of staking LUNA tokens with validators and facilitating LUNA wallet transactions, as opposed to generating fraudulent Chai transactions.
Kwon's legal representation has further accused the SEC of misreporting evidence and a fictional story that bears no impact on the ongoing procedural motion. They also argue that the SEC’s appeal is founded on misrepresented irrelevant evidence, thereby maligning Kwon.
Meanwhile, Kwon's lawyers are urging a US federal court to dismiss the SEC's plea to have him extradited to the U.S. concerning the collapse of the Terra ecosystem. Given that Kwon is currently detained in Montenegro for passport fraud, this extradition demand is being deemed "impossible.
Published At
9/30/2023 2:23:03 AM
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