Do Kwon allegedly laundered $4.8M through Terraform Labs — Report

Key Takeaways:

  • Terraform Labs CEO Do Kwon might face charges for laundering $4.8 million
  • The recent allegations add to a series of legal troubles for Terra.
Terra founder Do Kwon might be facing more legal trouble. Image from Freepik
Terra founder Do Kwon might be facing more legal trouble. Image from Freepik

NEW DELHI (CoinChapter.com) — Terraform Labs’ legal woes do not seem like ending anytime soon. Terraform Labs CEO Kwon Do-Hyung, better known as Do Kwon, might face allegations of laundering nearly $4.8 million via a shell company and Terra’s existing legal troubles.

@FatManTerra, the pseudonymous Twitter account of a “Terra insider,” released information linking Do Kwon to a blockchain consultancy firm for laundering money. In addition, FatMan shared a South Korean news website, KBS News’ report, which quoted an unnamed Terra developer.

The report highlights a blockchain consulting firm in Seoul, which KBS identified as ‘Company K.’

Also Read: Terra risks facing legal action after its native token LUNA crashes 99%.

FatManTerra argued that the mysterious ‘Company K’ is Terraform Labs’ sister company, Kernel Labs. However, a Terra developer confirmed that Terra used Company K as a shell company. Additionally, FatManTerra noted that the employee list for both the firms had several overlaps.

In addition, Company K filed for incorporation in 2018, the same as Terra. Several employees of Company K also happened to be Terra developers. However, Company K’s CEO, Mo Kim, denied any major affiliations with Terra.

“I think it can be said that most of those people did (development) work. Developers are not that common on the blockchain side. I remember them all doing it.”

Mo Kim told KBS news [Translated from Korean]

FatManTerra highlighted that Korean tax authorities reported that Terra sent 6 billion won ($4.8 million) to company K’s CEO, reporting it in their accounts as “other expenses.”

If the two firms were “one and the same,” Terra would be guilty of laundering money via Company K, which FatManTerra believes is Kernel Labs.

Do Kwon’s Relationship With Company K

Furthermore, FatManTerra cited another Korean news site’s report, highlighting links between Terra CEO Do Kwon and Kernel Labs. The news outlet reported that Kernel Labs had filed the patent for “Method and Device for Providing Stable Coin Services on a Blockchain,” Terra’s original patent.

Records show that Do Kwon and research team lead Nicholas Platias wrote the patent. Additionally, FatManTerra alleged that Terraform Labs is working hard to hide its links with Kernel Labs. They noted that Kernel removed any mention of Anchor or Mirror protocols from their website.

FatMantTerra alleged Do Kwon removed Kernel Labs from Terra revival proposals. Source: Twitter/FatManTerra
FatMantTerra alleged Do Kwon removed Kernel Labs from Terra revival proposals. Source: Twitter/FatManTerra

Moreover, FatManTerra alleged that Do Kwon removed the mention of Kernel Labs from the Terra revival proposal. However, the first draft of the proposal mentioned Kernel Labs and noted that it partnered with Terraform Labs to create Terra.

Additionally, KBS also reported that they approached several employees of Terraform Labs, but all of them declined to answer.

Also Read: LUNA 2.0 down 78% from launch as investors dump airdropped tokens.

Terra’s legal voes seem unlikely to end anytime soon. South Korean lawmakers suggested summoning Do Kwon for an investigation after the demise of LUNA/UST early in May. In addition, LUNA and UST investors are also suing the firm after losing their savings in the crash.

Meanwhile, Terra’s legal team dramatically resigned in a mass walkout on May 17, adding to the troubled company’s woes. In light of the recent controversy, investor confidence in the Terra revival plan and Do Kwon will likely dwindle.

LUNA 2.0 prices are already down more than 70% after launch, indicating the lack of trust in the blockchain firm.

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Do Kwon, Do Kwon allegedly laundered $4.8M through Terraform Labs — Report

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