The Number 1 Crypto Enemy – We learned about it in brief last weekend. While Do Kwon remains the most wanted fugitive crypto right now, the DRY has decided to redouble its efforts by also opening a investigation against the founder of UST and Terraform Labs. Thus, in a new report, it reports new damning revelations about our man.
Do Kwon and the SEC: Catch Me If You Can!
As a reminder, thecollapse from the stablecoin of Terra (UST) last May wiped out more than $40 billion in the crypto market and has taken with it many ecosystems like, Three Arrows Capital. South Korean justice, aided by Interpol, then issued a international arrest warrant against Do Kwon.
Believed to be in Dubaithen in Europe, sometimes taunting the authorities on social networks, especially Twitter, Do Kwon has become over the months thecrypto enemy number 1. In this context, the SEC has also decided to lead the attack. And, in a damning 55-page report, she lists her accusations against Do Kwon.
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Do Kwon’s Little Secrets
Do Kwon, an almost perfect stablecoin
First, the American policeman sheds light on the fraud ridden by Do Kwon. Let’s start with its algorithmic stablecoin, the TerraUSD. As a reminder, algorithmic stablecoins use complex mathematical formulas to maintain their 1-to-1 parity with the dollar.
The SEC reveals, in its report, that this stablecoin had already stalled in May 2021. To avoid the crash and calm the wind of panic, Do Kwon would have secretly asked Jump Trading a helping hand. It would therefore be a massive purchase of UST in May 2021carried out a year before the implosion of the Terra ecosystem, which restored the stablecoin’s footing.
THE reassured investors in the face of the apparent resilience of UST reinvest. In the operation, after buying UST at a low price, Jump Trading even manages to pull $1.3 billion of this operation according to the SEC.
Moreover, the European policeman points out that the UST should have been declared in quality of securities, thus offering another prism at the opening of this investigation: that of a new assault on stablecoins. Four other assets are also in the regulator’s line of sight: the MIRTHE LUNA and their wrapped equivalents.
Do Kwon and the Little Lies
The list of admonitions from the SEC does not end there. The US Constable points out that to make his blockchain attractive, Do Kwon has inflated its transactions And lied on the transaction volumes with investors. So he was able, for example, to confirm that a North Korean payment company named Chai was using Terra for millions of transactions. But that was wrong.
To better fool his people, Kwon’s team has programmed a server to process Chai’s transaction data. This data has been replicated to that of the blockchain. This commercial support was a lie. In reality, Chai Corporation was also owned by Kwon and Daniel Shin Kyun-seung. The two companies shared, like FTX and Alameda Research, the same offices. At the time of writing these few lines, Chai, beyond being a third party in the Do Kwon case, is under a judicial investigation in South Korea.
Do Kwon and secret bitcoins
Finally, as we mentioned last weekend, Do Kwon also had a secret reserve of more than 10,000 bitcoinstransferred by Kwon from Terraform and related entities to a cold wallet.
The SEC also notes that in May 2022, at the time of the collapse of the strablecoin, the bitcoins in this wallet were transferred to an anonymous Swiss bank and converted into fiat. As a result, since June, and while he is on the run, more than $100 million in fiat currency which are withdrawn at the bank.
While he would have been spotted in Serbiathe vice tightens gently on Do Kwonwhich continues to be the most wanted fugitive crypto. The South Korean authorities have recently announced that they are going there to find common ground with the local authorities and above all to discuss the Do Kwon case.
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