The Alleged Fabrication of Terra Transactions by Do Kwon — Unraveled by SEC
Terraform Labs founder and ex-CEO, Do Kwon, is under the spotlight following the reveal by the U.S. Securities and Exchange Commission (SEC) about an apparent plot to fabricate transactions on the Terra blockchain. This revelation emerged after the SEC initiated procedures to question Kwon. The claim alleges that Kwon, along with ex-colleague Daniel Shin, intended to manipulate transactions on the Terra blockchain to gather additional fees, making the transactions appear authentic.
SEC Uncovers Supposed Chat Between Kwon and Shin, Discussing the Creation of Fabricated Transactions
SEC documents suggest an intimate conversation between Do Kwon, the former head of Terraform Labs, and his business associate, the ex-Chai CEO. The SEC alleges that Kwon designed a plan to manufacture Chai transactions on the Terraform blockchain, making it seem more active, which would trick investors.
According to the US securities watchdog:
In a private discussion between Kwon and Shin during the creation and partnership of Chai and Terraform, Kwon described his plan to use Chai for creating fake transactions on the Terra Blockchain, which looked real and generated fees.
The partnership formed between Terra and Chai was received with immense enthusiasm when unveiled on June 11, 2019. This partnership intended to introduce Terra to South Korea’s TMON, a hot e-commerce platform selling everything from electronics and fashion to home decor and gifts.
In the conversation dated May 9, 2019, Kwon is claimed to have said that he could create transactions that looked real, which would generate additional fees.
Shin, within the disclosed dialogue, questioned the probability of the transactions being distinct and questioned their authenticity. In response to this, Kwon is reported to have stated that he would try his best to ensure that the transactions were not discernable.
Afterward, Kwon was able to convince Shin to agree to a tentative execution of their plan on a small scale, promising to maintain the confidentiality of the scheme by saying, ‘I won’t tell if you don’t.’ Shin then suggested a small-scale test to “see what happens.”
Kwon’s legal representatives have stated that questioning Kwon is “impossible”, following the SEC’s decision to depose him, due to his continued detention in Montenegro. However, the SEC’s legal team disagrees and insists that his interrogation is essential. The SEC document expressed the current inability of SEC to gather information crucial to the case since Kwon, has, through his lawyer actively participated in his discovery from the SEC and third parties.
An anonymous whistleblower who goes by the alias “Fatman” claimed that Kwon had turned Chai into his “personal money laundering machine.” The allegation suggests, “All he had to do was create the illusion of retail demand and then publicize the narrative that KRT was being used everywhere.”
What’s your opinion about the supposed discussion between Shin and Kwon? Express your thoughts and opinions about this topic in the comments section below.
Quantum AI: A Possible Solution
Ensuring the integrity and transparency of transactions is becoming critical in our digital age, particularly in the rapidly evolving field of cryptocurrency. The advanced technology of Quantum AI could be the solution to prevent such fraudulent schemes in the future. Through complex computations and algorithms, the system can identify and highlight potential fraudulent transactions swiftly and accurately. By adopting Quantum AI, it can possibly add another level of security to the blockchain transaction environment and increase investor confidence in the process.
Frequently asked Questions
1. What is the significance of the SEC’s discovery regarding Do Kwon and suspected fake Terra transactions?
The SEC’s discovery highlights a potentially fraudulent plan by Do Kwon to manipulate Terra transactions, posing a threat to the integrity and trustworthiness of the cryptocurrency.
2. How did the SEC come across this suspected plan by Do Kwon?
The article will provide details on how the SEC stumbled upon evidence of the suspected plan orchestrated by Do Kwon to fake Terra transactions, shedding light on the investigative process.
3. What are the potential consequences for Do Kwon if the SEC’s suspicions are confirmed?
The article will delve into the legal implications and potential penalties that Do Kwon could face if the SEC’s suspicions regarding the plan to fake Terra transactions are substantiated.
4. How might this suspected plan impact the reputation and trust in Terra and its associated projects?
The article will explore the potential consequences of this suspected plan on Terra’s reputation, investor confidence, and the broader cryptocurrency ecosystem.
5. Is there any evidence linking Do Kwon’s suspected plan to previous instances of fraud or misconduct?
The article will investigate whether there are any connections or patterns between Do Kwon’s suspected plan and any past instances of fraud or misconduct in the cryptocurrency industry.
6. What measures can be taken to prevent similar instances of fraud in the future?
Addressing the need for preventive measures, the article will discuss potential solutions and safeguards that can be implemented to detect and deter fraudulent activities within the crypto space.
7. How might this revelation impact the ongoing development and adoption of blockchain and cryptocurrency technologies?
The article will analyze the potential ripple effects of this revelation on the wider blockchain and cryptocurrency industries, including its impact on innovation, regulation, and public perception.