What Did Do Kwon Do? CEO Allegedly Cashed Out US$80 Million Each Month Before Terra Crash

Terraform Labs employees have reportedly confirmed to the US Securities and Exchange Commission that its co-founder and CEO Do Kwon was sending off ₩100 billion won or about US$80 million to secret wallets every month as operating expenses.

JTBC News reports that the SEC has received statements from Terraform employees that say “the funds flowed into dozens of cryptocurrency wallets” in the months leading to the collapse. This particular activity, according to the report, has allegedly raised suspicions of money laundering. One key informant also shared that Do Kwon had not received any official payment from the company.

Kwon’s Singapore-based Terraform Labs is the firm behind the Terra blockchain, which features the stablecoin known as TerraUSD (UST). UST was designed to maintain a 1-to-1 peg to the US dollar through an algorithm and trading in the associated LUNA token. 

The stablecoin’s collapse on May 7 obliterated tens of billions of dollars in value. It was felt all throughout the crypto market, and has had lawmakers calling for regulation to protect consumers. But the company nor its CEO has been accused of any crimes related to UST.

According to a Bloomberg report, the SEC is currently looking into whether the marketing of the TerraUSD stablecoin violated federal investor-protection regulations prior to its dramatic crash early in May. The probe, as discussed by an unidentified resource familiar with the matter, is confidential, and it has SEC enforcement attorneys investigating whether the firm broke rules for securities and investment products.

Terraform, meanwhile, has said in a statement that it was not aware of this SEC investigation.

Information for this briefing was found via Watcher Guru, JTBC News, Bloomberg, and the other sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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