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

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 

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.