Terra Founder Do Kwon Accused of Cashing out $2.7B Before UST Collapse

The LUNA 2.0 rebirth token has been extremely lackluster in terms of market performance during the past two weeks.

Terra’s 2.0 chain has roughly $1.32 billion locked in the Stader defi application according to defillama.com stats.

The Terra Classic chain still has $10.54 million total value locked in defi today as well, with $3.11 million held on Terraswap and $2.47 million locked into Anchor.

During the past two weeks, after LUNA 2.0 tapped a high of $11.33 per unit, the new LUNA has lost 54% during the last 14 days. It is still down 86% from the all-time high at $18.87 per coin when the 2.0 blockchain was first launched.

While LUNA’s market performance has not been so hot, alongside a variety of crypto assets suffering through the bear market, Do Kwon is still being accused of shady acts by the whistleblower Fatman.

Fatman has pushed the term Kwonzi to mean a financial scheme with “borrowed elements from and a similar negative-sum nature to a Ponzi but not a Ponzi – cleverly obfuscated by sophisticated manipulation, legitimate technology, and jargon.”

The U.S. Securities and Exchange Commission (SEC) is reportedly investigating the terrausd (UST) collapse and the company Terraform Labs (TFL).

On June 11, 2022, Fatman accused Kwon of siphoning $2.7 billion from the Terra project a few months before the UST fallout.

Fatman says the defi borrowing protocol Abracadabra’s Degenbox and tokens like SPELL and MIM were used to provide “deeper exit liquidity to the UST pair.”

The whistleblower said that Kwon was able to cash out via the MIM/UST pool to the tune of $2.719 billion without moving the peg.

“UST is the future, he said. Decentralized money is sound money, he said,” Fatman continued. “UST won’t de-peg, he told you. ‘Centralized stablecoins will rug you eventually.’ So why did he cash out $2.7b from UST into USDT and USDC?”

However, Do Kwon has refuted the claims he cashed out $2.7 billion before the UST crash.

“This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false,” Kwon said the same day Fatman accused him.

Kwon also has his Twitter account set to private mode and only people Kwon tags in a tweet can reply.

“Two contradictory claims seem to exist where: Do’s wallets are doxxed, and he still owns most of his luna through the airdrop [or] Do dumped all his tokens to make billions,” Kwon continued. “A lane should ideally be picked.”

On Twitter, people have discussed how Kwon is a lot more humble now in comparison to calling people “poor” during LUNA’s peak fame. Others have been discussing Kwon reportedly “bending over” Abracadabra founder Daniele Sesta and “SPELL bagholders.”

Meanwhile, Fatman continues to accuse Kwon of dirty tricks and the whistleblower has not stopped criticizing Kwon’s ostensible acts, or his current commentary and refutation.