Do Kwon, the founder and former CEO of Terraform Labs, was called to be removed by the U.S. Securities and correspondence Commission (SEC), who also made public an alleged correspondence between him and his former associate Daniel Shin. The former Terra CEO allegedly asserted that he could create fake transactions on the Terra blockchain in order to make them legitimate and generate fees. He also wrote that he could work to make the fake transactions "indiscernible."
Leaked Chat Between Kwon and Shin: "I Can Just Create Fake Transactions"
A supposed dialogue between Do Kwon, the creator and former CEO of Terraform Labs, and Daniel Shin, his business partner and the previous CEO of Chai, is depicted in court documents filed by the SEC. In order to deceive investors, the SEC petition alleges that Kwan "perpetrated a scheme to fabricate Chai transactions on the Terraform blockchain in order to make it appear more active."
The American securities watchdog added:
For instance, Kwon explains how he wanted to use Chai to make fictitious transactions on the Terra blockchain that would appear legitimate and generate fees in a lengthy private discussion with Daniel Shin2 during the early phases of Chai and Terraform's development and cooperation.
When Terra and Chai's partnership was announced on June 11, 2019, it generated a lot of excitement. The company explained that the agreement allowed Terra to enter South Korea's TMON, a thriving e-commerce hub that sells a wide range of goods, including gifts, electronics, and clothing.
On May 9, 2019, Kwon and Shin are said to have spoken, and during that conversation, Kwon is quoted as saying, "I can just create fake transactions that look real, which will generate fees."
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| the purported text conversation between Daniel Shin and Do Kwon. |
Shin questions the prospect of learning about the veracity of these transactions within the discourse that has been made public. In response, Kwon is quoted as saying, "I will try my best to make it indiscernible."
After convincing Shin to support the plan under the guise of secrecy, a deal that was struck with a lighthearted "I won't tell if you don't," Shin appears to suggest a smaller-scale trial to "see what happens."
Kwon's legal counsel recently described the SEC's attempt to remove him as "impossible," highlighting the fact that he is being held in Montenegro. The legal staff for the SEC disagrees with Kwon's position and emphasizes the necessity of questioning him.
The most important witness in this case has aggressively performed his own discovery from the SEC and third parties through counsel, according to the SEC statement, which states that the SEC is currently being denied its fundamental right to acquire the pertinent evidence.
After the ecosystem's collapse, rumors began to circulate about Terra and Chai's strange connection. The flames were further fueled when a leaker using the nickname "Fatman" published a thread stating Kwon had turned Chai into his "personal money laundering machine."
The whistleblower said on May 28, 2022, "All he had to do was create the illusion of retail demand and then publicize the narrative that KRT was being used everywhere."
What do you make of the purported exchange between Shin and Kwon? Post your ideas and viewpoints on this topic in the comments area below.