Do Kwon denies allegations of withdrawing $2.7 billion from the Terra ecosystem ahead of its collapse

Terraform Labs head Do Kwon has disputed reports that he allegedly withdrew billions of dollars from the Terra ecosystem before its collapse. He called such claims “categorically false.”

Earlier, analyst FatMan claimed that the strategy Degenbox $UST-$MIM on the Abracadabra platform enabled Do Kwon to withdraw more than $2.7 billion in UST from Terra over a period of months.

🧵 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

“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 a span of months thanks to Degenbox: the perfect mechanism to drain liquidity out of the LUNA and UST system into hard money like USDT,” he wrote.

FatMan explained that the strategy offered high returns and was promoted by “Terra influencers.” By his account, it created the liquidity needed to move funds — thanks to strong demand enabling the exchange of UST for MIM without breaching the peg.

Here’s the total amount of MIM Do Kwon was able to cash out through the MIM/UST pool — without even moving the peg! $2,719,132,772.01, to do with what he pleases. No need to dump LUNA or sell UST on exchanges — he drummed up liquidity from all of you. (7/13) pic.twitter.com/vRVve3WRsj

— FatMan (@FatManTerra) June 11, 2022

The analyst noted that MIM was eventually swapped for USDT and USDC, and then sent to addresses of centralised exchanges, including Binance, KuCoin and Huobi.

FatMan called on Terraform Labs to explain the purpose of these operations, disclose the sources of funds into the Luna Foundation Guard reserve, and publish data on the deals the company conducted to stabilise the price of UST.

In response, Do Kwon stated that his sole income over the past two years was a “nominal monetary salary” at Terraform Labs. He said he delayed taking most of the founder tokens because he did not need them.

2/ Two contradictory claims seem to exist where:

1. Do’s wallets are doxxed, and he still owns most of his luna through the airdrop
2. Do dumped all his tokens to make billions

A lane should ideally be picked

— Do Kwon 🌕 (@stablekwon) June 12, 2022

In May 2022, FatMan said that Kwon and venture capitalists manipulated the governance of the DeFi project Mirror Protocol and deceived retail investors.

Bloomberg reported that the U.S. Securities and Exchange Commission initiated an investigation into the algorithmic stablecoin UST. 

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