Terra's Do Kwon cashed out over $80 million per month before LUNA and UST collapse


  • Terraform Labs' employees told the US Securities and Exchange Commission that Do Kwon cashed out $80 million every month.
  • The US Securities and Exchange Commission recently inquired into Terra's poor design structure and conducted remote video surveys. 
  • LUNA 2.0 price plunged 85% since its launch, continuing a downtrend as analysts predict further losses. 

Terraform Lab CEO Do Kwon is in trouble with the US Securities and Exchange Commission, as the regulator has taken note of money laundering activities. The independent agency of the US government has launched an investigation into Terra's collapse. 

Also read: Terra's Do Kwon caught lying about 42 million LUNA shadow wallet

Do Kwon cashed out $80 million every month 

Do Kwon, CEO of Terraform Labs and the co-founder of Terra, is currently under investigation by the US Securities and Exchange Commission. The US regulatory agency is investigating the money laundering activities of Do Kwon. 

South Korean news agency Naver and JTBC reported:

The US Securities and Exchange Commission recently conducted a remote video survey of some of Terra's key designers and focused on inquiring about Terra's poor design structure.

JBTC has reported on the collapse and de-peg of algorithmic stablecoin UST and LUNC (previously LUNA). The agency reported that the US SEC reportedly discovered that $80 million was being pulled out of Terra's funds monthly and sent to different wallet addresses for operating expenses. 

The SEC notes that Kwon started the $80 million withdrawals a few months before the collapse of Terraform Lab's sister tokens, LUNC (formerly LUNA) and UST. This activity is being considered suspicious and related to money laundering. The $80 million flowed out to dozens of cryptocurrency wallets, yet according to a key Terra employee, who was an informant to the SEC, Kwon had not received any official payment from Terraform. 

Kwon's run in with the SEC

This is not Kwon's first run-in with the US SEC. The SEC has previously investigated Terraform Lab's project Mirror Protocol in 2021 and served Do Kwon a subpoena at a New York conference on September 20. 

Mirror, a decentralized finance (DeFi) protocol on the Terra blockchain, facilitated the mint of synthetic assets. Since the crash of UST, the protocol has been in disarray. 

The SEC is currently investigating Kwon Do-Hyung for violating the Securities Act. The regulator believes that the blockchain service had made it possible to buy US equities with Terra, violating the Securities Act. 

If the charges against Kwon are true, the Terraform Lab CEO could face legal action in the United States. 

Attorney Philip Moustakis was quoted as saying,

I don't see how the SEC or CFTC could not investigate the ashes of UST and Luna as well as other stablecoins and their issuers. In fact, I expect some coordination between the two agencies in this regard.

LUNA 2.0 price continues to bleed

LUNA 2.0 price nosedived 83.9% from its all-time high of $18.87. Despite the relaunch of the Terra chain, LUNA Classic (LUNC) and LUNA 2.0 prices have failed to recover. 

Analysts have a bearish outlook on LUNA 2.0 price. Technical indicators reveal the possibility of a drop below $1.5, 50% below the current price level, which could occur soon in LUNA 2.0. The trade volume has dropped, and investors have lost interest in the token. 

Analysts have identified a descending parallel channel displaying the possibility of a bearish trend in LUNA 2.0 price. Only if the LUNA 2.0 price crosses the $4.5 level, could the token witness a trend reversal. 

LUNA 2.0 price chart

LUNA 2.0 price chart 

FXStreet analysts have shared trade ideas for Terra LUNA 2.0 and continue to see the possibility of a recovery. For more information, watch this video.

 


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Arbitrum community opens vote for 200 million ARB Gaming Catalyst Plan proposal

Arbitrum community opens vote for 200 million ARB Gaming Catalyst Plan proposal

Arbitrum community opened a vote for its Gaming Catalyst Program (GCP) to boost support for game builders in the ARB ecosystem. The plan is to strategically allocate 200 million ARB to game projects within Arbitrum. The token has sustained its gains from the week.

More Arbitrum News

ONDO extends gains by 4% with rise in non-empty wallets, hits new all-time high

ONDO extends gains by 4% with rise in non-empty wallets, hits new all-time high

Ondo extended gains by 75% increase in the past 11 days, per crypto intelligence tracker Santiment. The token ranks among top trending assets on the platform, with a massive spike in non-empty wallets. ONDO added 4% value to its price on Sunday, sustaining 40% gains from the week. 

More Ondo News

Aptos user transactions hit record high, APT eyes over 20% gains

Aptos user transactions hit record high, APT eyes over 20% gains

Aptos user transactions in a single day reached 97.488 million. The number of user transactions and Transactions Per Second, both metrics hit a record high, supporting the thesis for price gains in APT. The rise in transaction-related metrics can be attributed to Tapos, a viral clicker game where users can earn rewards. 

More Aptos News

US Presidential candidate Donald Trump is open minded to cryptocurrency, supports right to self custody

US Presidential candidate Donald Trump is open minded to cryptocurrency, supports right to self custody

US Presidential candidate Donald Trump shared positive views on crypto, posting on social media platform, “I am very positive and open minded to cryptocurrency companies and all things related to this new and burgeoning industry.” 

More Cryptocurrencies News

Bitcoin: BTC struggles, but $80K is at striking distance Premium

Bitcoin: BTC struggles, but $80K is at striking distance

Bitcoin (BTC) price is in a good position to resume the bull rally despite the recent struggle. Optimism will restart if BTC overcomes a critical hurdle and flips it into a foothold. In such a case, the pioneer crypto will be slated to push to a new all-time high (ATH). 

Read full analysis

BTC

ETH

XRP