Legal troubles are mounting for the co-creator of the fallen Terra ecosystem, Do Kwon, as Binance launches inquiries into the allegations made by Terra insider ‘FatManTerra’.
Binance Digs Deeper Into FatManTerra’s Allegations Against Terra, Do Kwon
When TerraUSD (UST) stablecoin and LUNA stole the show in the cryptosphere months ago, investors went wild. The two cryptocurrencies delivered outstanding returns for those who got in early, and it seemed that Do Kwon and his pet projects could do no wrong in the crypto market.
After going ballistic and securing crème de la crème spots on the crypto leaderboard, both UST and LUNA crashed back to earth in a flash — and unnerving legal issues are now escalating.
Speaking with Fortune regarding Binance’s support of Terra as it attempts to come from the dead, CEO Changpeng “CZ” Zhao indicated that he was very surprised when reports revealed that Kwon had created Basis Cash, an earlier failed algorithmic stablecoin project. He admitted his team should have done better in terms of due diligence.
CZ claims he has never spoken directly to the Terra creator even after the abrupt plunge in UST and LUNA’s values. Interestingly, the Binance chief has been following tweets by FatManTerra. As a matter of fact, he has now advised his team to more closely scrutinize the allegations leveled against Kwon and Terra by the account.
For those unaware, FatManTerra, who claims to be affiliated with Terra’s Research Forum, has been sharing searing exposés of Terraform Labs, the Luna Foundation Guard, and Kwon himself following the Terra demise.
The anonymous account previously accused Terra and its CEO of manipulating the prices of UST and LUNA by paying various cryptocurrency exchanges and third-party operators, which resulted in users suffering massive losses. The account also said Kwon and other top Terra employees “have been earning jaw-dropping farming rewards unencumbered via insider trading, tokenomics adjustments, and barriers to entry.”
FatManTerra also called out Terra for not reimbursing smallholders that lost money during the UST de-pegging event.
Terra’s Mounting Legal Woes
The Terra dumpster fire continues to rage out of control.
After the devastating collapse of the Terra network earlier this month, many accused Do Kwon of foul play. He was further criticized for tax evasion and unscrupulous profiteering.
South Korean regulators are also investigating whether Kwon perpetrated fraud in targeting investors with his failed crypto projects. As ZyCrypto reported, prosecutors in the country have summoned all former employees of Terraform Labs as part of investigations into whether there was internal price manipulation.
Meanwhile, CZ says Binance won’t hesitate to share any useful information they gather from their investigations with law enforcement. “I said, ‘look, based on the data that we have, if we can draw any conclusions, we should share that with law enforcement.’ To date, we cannot confirm or deny any of the allegations.”