SEC Publishes Leaked Chat Between Kwon and Shin
The U.S. Securities and Exchange Commission (SEC) has released a leaked chat between Do Kwon, the creator and former CEO of Terraform Labs, and his former associate Daniel Shin. According to court filings submitted by the SEC, Kwon allegedly planned to fabricate transactions on the Terra blockchain to make them appear authentic and generate fees.
In the chat, Kwon discusses using Chai to create fake transactions on the Terra blockchain that would generate fees. When asked about the likelihood of discovery, Kwon states that he will try his best to make the transactions indiscernible.
Alliance Between Terra and Chai
Terra and Chai formed an alliance that was announced on June 11, 2019. The partnership allowed Terra to enter South Korea’s TMON, a popular e-commerce platform. The alliance received significant attention at the time.
Legal Battle and Whistleblower Allegations
Kwon’s legal representatives have claimed that it is impossible for him to be deposed due to his detention in Montenegro. However, the SEC argues that his interrogation is necessary to gather relevant facts in the case.
In addition to the SEC investigation, a whistleblower known as “Fatman” has alleged that Kwon used Chai as a personal money laundering machine. The whistleblower claims that Kwon created an illusion of retail demand for his cryptocurrency KRT.
Hot Take: SEC Investigation Reveals Alleged Scheme by Terraform Labs Founder
The recent release of a leaked chat between Do Kwon and Daniel Shin by the SEC has shed light on an alleged scheme involving fake transactions on the Terra blockchain. This revelation raises concerns about the authenticity of transactions on the platform and the potential for manipulation to generate fees. The SEC’s investigation and the whistleblower’s allegations further highlight the need for transparency and accountability in the crypto industry. As regulators continue to crack down on fraudulent activities, it is crucial for investors to exercise caution and conduct thorough due diligence before engaging with any blockchain project.
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