Do Kwon, formerly known as the genius and mastermind in the crypto world, is now surrounded by allegations following the Terra coin’s crash. The CEO had claimed he had bought Bitcoin reserves to save LUNA in case of a crisis, but those reserves were nowhere to be seen when the coin actually crashed.
As UST/LUNA fails to rise from the extreme crash, allegations of manipulating the liquidity surround the CEO of Terra ecosystem, Do Kwon. According to a Twitter user, FatManTerra, Do Kwon, and many Terra influencers were involved in draining liquidity from LUNA/UST before the crash, which the CEO strictly denied.
The great crypto crash that came in the first week of May 2022, swept almost every cryptocurrency’s position in the market. Even the strongest coins like Bitcoin, ETH, SOL, etc. failed to maintain their resistance and support level.
As a result, almost every digital currency was able to manage the crash somewhere, except LUNA/UST which crashed so badly with no hope of recovery. The Terra team tried saving it through LFG reserves, still, the coin went weak until no power was left in it to survive the crypto winter.
Based on Do Kwon’s statements, the Terra blockchain was trying its best to recover from the crash but a Twitter user FatManTerra stripped the curtain behind the crash by posting a thread.
The user claimed that Do Kwon took out $80 million every month for almost three years. Which is around $2.7 billion. According to various sources, the CEO knew about the crash and he deliberately drained the liquidity out of LUNA, now known as Classic LUNA (LUNC) and UST or TerreaUSD Classic (USTC).
FatManTerra also added that Do Kwon used Degenbox, a borrowing protocol where people can loop stablecoin buys, to cash out from the reserves and managed to maintain the liquidity of the Terra coins artificially no one could suspect what happened in the background.
As soon as the rumors spread on Twitter, Do Kwon released an official statement and denied the allegations. He said, “This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.”
He addressed the allegations by saying that the rumors about him taking out $80 million every month from LUNA/UST reserves are baseless since he is still the owner of LUNA holdings. He also added that his income salary came from TerraForm Labs, instead of the reserves.