Terra

Korea and US agree to share investigation data on Terra

The two nations have agreed to share their investigation data on the ongoing crypto-related cases including Terra.

South Korean justice minister Han Dong-hoon was in New York recently to discuss various ways in which the two nations can corporate on investigations associated with financial crimes, especially crypto-related crimes.

Hoon met with Securities and Commodities Task Force co-chief Andrea M. Griswold at the United States Attorney’s Office for the Southern District of New York along with Scott Hartman, chief of the Securities and Commodities Fraud Task Force of the same office on Tuesday, reported a local news publication.

The two sides discussed ways to exchange information and strengthen cooperation to ensure timely action on the increasing number of securities frauds associated with the digital asset market, reported the publication. The two sides have reportedly agreed to share their latest investigation data around Terra, a crypto project under investigation in both countries.

Justice Minister Han Dong-hoo (left) meets with prosecution officials from the United States, Source: Yna

The $40 billion Terra ecosystem crash has attracted legal scrutiny from both countries. The U.S has recently opened a new investigation against Terra co-founder Do Kwon, while the South Korean prosecutors are looking into several charges including fraud, market manipulation and tax evasion.

Related: Terra 2.0: A crypto project built on the ruins of $40 billion in investors’ money

The cooperation between the two nations could be the first of many as crypto-related crimes have become the focus of regulators in recent times. South Korea has emerged as one of the most strict nations when it comes to crypto regulations, ensuring strict Know Your Customer (KYC) and Anti-Money Laundering (AML) guidelines.

The Terra saga has also prompted Korean lawmakers to form a new crypto oversight committee to assess the new crypto projects listed on crypto exchanges. Many experts have predicted that the crash of TerraUSD Classic (USTC) would prompt regulators to favor centralized stablecoins over algorithmic ones.

Due to the lack of clear crypto regulations, tracking and prosecuting these crimes, which often involve cross-border transactions and laundering, becomes increasingly difficult and complex. For example, a Dutch university paid 200,000 in Bitcoin (BTC) as a ransom in 2019. The investigators managed to track one wallet to Ukraine and eventually had to work with the local authorities to get back the funds nearly three years after the hack.

Double bubble? Terra’s defunct ‘unstablecoin’ suddenly climbs 800% in one week

The USTC price rally does not mean it would reclaim its lost U.S. dollar peg in the future.

Terra’s $40-billion experiment to create a functional “algorithmic stablecoin” project has failed drastically following its collapse in May.

Nonetheless, its native stablecoin TerraClassicUSD (USTC), earlier called TerraUSD (UST), has been thriving in the past week.

Dead stablecoin walking

To recap, UST lost its U.S. dollar peg in May following mass withdrawals from Anchor Protocol, a lending and borrowing platform offering up to 20% yield to clients on their UST deposits. As of June 15, the token was almost worthless, trading at $0.005 at the Kraken crypto exchange.

But USTC started recovering afterward, insomuch that its value per token almost reached $0.10 on June 29. Simultaneously, its capitalization surged from $65 million to $767 million in the same period, according to data from CoinMarketCap.

USTC market cap. Source: CoinMarketCap

That is despite USTC operating as an abandoned token after Terra launched a new blockchain with a new native asset LUNA 2.0, following a “hard fork” in May.

Interestingly, LUNA 2.0’s older version, called LUNA, which now operates under the name “Terra Classic (LUNC), has also witnessed a spike in its market valuation like USTC, surging from around $160 million to $767 million in June.

LUNC market cap. Source: CoinMarketCap

Massive concentrated Terra pump

According to CoinMarketCap, more than 45% of trading volume behind USTC and LUNC’s surprising price boom has originated from KuCoin, a centralized exchange platform reportedly operating from Seychelles.

KuCoin’s lead backer is NEO Global Capital, a Singapore-based venture capital firm also exposed to financial platforms like Babel Finance and CoinFLEX. Both platforms have been facing liquidity troubles due to the ongoing crypto market decline.

“This isn’t a boom, bust and boom again cycle,” warned InvestmentU, a financial analytics group in its June 28 note, saying that LUNC could decline massively because “the tech behind it is dead.”

“Its (LUNC) raison d’etre has been vanquished. And so has its price. While we can appreciate investors’ natural desires for outsized gains, there are better ways to go about it than this.”

Related: Terra’s LUNA2 skyrockets 70% in nine days despite persistent sell-off risks

The outlook appears the same for USTC, which has failed to perform its main function, i.e., providing clients a digital, stable version of the U.S. dollar.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

SOL price trending toward yearly low as Solana TVL drops $870M in three days

DeFi contagion fears and bearish technicals mean additional downside pressure on Solana price.

Solana (SOL) tumbled on June 16 amid a broader retreat across the top cryptocurrencies, led by the Federal Reserve’s 0.75% interest rate hike a day before.

Solana price rebound fizzles

Notably, SOL/USD plunged nearly 17% to $30 a token, wiping out almost all the gains from the day before. The SOL price volatility liquidated almost $10 million worth of contracts in the past 24 hours across multiple crypto exchanges, data from Coinglass shows. 

SOL liquidation record since May 17. Source: Coinglass 

The latest declines come as an extension to SOL’s broader correction, where it dropped by more than 90% after peaking out near $267 in November 2021. SOL also fell to its lowest level since July 2021 near $25.

In addition, a higher interest rate environment and the collapse of high-profile crypto projects like Terra have strengthened SOL’s downside prospects. 

SOL paints “ascending triangle”

Solana’s pullback move on June 16 began after testing a horizontal trendline resistance near $34 that constitutes what appears to be an “ascending triangle” pattern.

Ascending triangles are continuation patterns, i.e., they tend to send the price in the direction of their previous trend. As a rule, breaking out of a triangle pattern in a bearish market, for example, sends the price down by as much as the structure’s maximum height.

If SOL breaks below its ascending triangle’s lower trendline then the bearish profit target will come below $22.50, as shown in the chart below.

SOL/USD four-hour price chart featuring “ascending triangle” pattern. Source: TradingView

Solana’s downside target is about 25% below June 16’s price and could be achieved by the end of June. Nonetheless, if SOL bounces after testing the triangle’s lower trendline as support, it would eye the $34–$36 range as its interim upside target.

Massive SOL exit

Over 27 million Solana tokens have exited its smart contract ecosystem since June 13.

The total value locked (TVL) inside Solana smart contracts dropped to 74.65 million SOL (~$2.25 billion) on June 16, down 27% in the last three days, according to data tracked by DeFi Llama. That amounts to nearly $840 million of withdrawals from the ninth-largest blockchain ecosystem by market cap.

Solana TVL performance since April 2021. Source: DeFi Llama

Solend, a lending platform functioning atop the Solana ledger, witnessed a 26.5% decline in its TVL in the last three days and was holding 9.66 million SOL (~$290 million) as of June 16. Nevertheless, it remains the leading platform by TVL within the Solana ecosystem.

Related: Liquidity provider asks platforms to freeze 3AC funds to recover assets after litigation

The outflows indicate that depositors do not want to keep their SOL locked in DeFi protocols, a sentiment common across the sector after Terra, an “algorithmic stablecoin” project, collapsed last month.

Therefore, Solana’s path of least resistance remains skewed to the downside in the near term, particularly with no improvement in terms of macro and fundamentals. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

NEXO price drops 40% in three days on contagion fears from ‘insolvent’ crypto fund

Nexo says it currently has no exposure to Three Arrows Capital and has 100% liquidity to meet its debt obligations.

The price of Nexo (NEXO) continued to fall on June 15 as crypto lending firms continue to be shaken by the falling cryptocurrency market.

Meanwhile, Nexo has denied rumors of exposure to Three Arrows Capital (3AC), a Dubai-based crypto fund facing insolvency risks.

NEXO price suffers on DeFi contagion fears 

NEXO, which serves as a security token at a cryptocurrency lending platform of the same name, fell nearly 25% to $0.61 a unit, its lowest price reading since January 2021.

The massive intraday decline came as a part of a broader downside move this week, which stretched NEXO’s losses to 40%.

NEXO/USDT weekly price chart. Source: TradingView

An ongoing contagion in the crypto lending sector contributed to NEXO’s underperformance.

Traders fear that most decentralized finance (DeFi)/centralized finance (CeFi) firms, which offer high yields to clients on their cryptocurrency deposits, will default on their debts due to the wipeout of nearly $1.5 trillion from the crypto market in 2022. 

The concerns continue to mount after the collapse of Terra (LUNA) — now known as Luna Classic (LUNC) — a $40 billion algorithmic stablecoin project, in May.

A month later, Celsius Network, which offers clients up to 18% yields, paused withdrawals due to “extreme market conditions.” Its clients have pulled almost half of their assets out of the platform since October 2021, thus leaving it about $12 billion as of May 17 to meet debt obligations.

Meanwhile, 3AC, a crypto hedge fund, has witnessed liquidations of at least $400 million. In addition, on-chain data reveals that the firm may also have a minimum debt of $183 million against a collateral position of $235 million (derived in Staked Ether).

The fund could transfer the economic risks to its lenders if it becomes insolvent.

“The lenders will bear the PnL [profit and loss] difference between how much they are owed versus what they get in liquidating their collateral,” noted Degentrading, a market commentator known for highlighting the Celsius Network’s liquidation issues.

He added:

“That means defaults will cause SIGNIFICANT EQUITY erosion […] Not all lenders are made equal. Celsius is the worst. It has gone under. Nexo, I don’t know. BlockFi is pretty bad as well.”

However, Nexo says it currently has no exposure to 3AC despite partnering with the fund over a nonfungible token (NFT) lending product in December 2021. The firm asserts that the partnership with 3AC did not take off.

What’s next for the NEXO token?

Nexo has 100% liquidity to meet its $4.96 billion worth of debt obligations, according to U.S.-based audit firm Armanino. That raises the firm’s potential to avoid a liquidity crisis in the event of a rising withdrawal rate, unlike Celsius.

Nonetheless, NEXO price treads ahead under persistent bearish risks, primarily due to the crypto market’s dire state in a high-interest rate environment. The NEXO/USD pair now eyes the $0.58–$0.69 range as its interim support due to its historical significance from December 2020 to January 2021.

NEXO/USD weekly price chart. Source: TradingView

A rebound from the $0.58–$0.69 range could have NEXO bulls eye $0.883 as their interim upside target. This level was instrumental as support during the early-May price crash; it now coincides with the 0.786 Fibonacci retracement graph drawn from the $0.11-swing low to the $3.71-swing high.

Related: Is the bottom in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh in

Conversely, a decline below the $0.58-$0.69 range could have NEXO watch December 2020’s support level near $0.43, down around 35% from June 15’s price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

DeFi contagion fears and rumors of Celsius and 3AC insolvency could weigh on NEXO price

Nexo says it currently has no exposure to Three Arrows Capital and has 100% liquidity to meet its debt obligations.

The price of Nexo (NEXO) continued to fall on June 15 as crypto lending firms continue to be shaken by the falling cryptocurrency market.

Meanwhile, Nexo has denied rumors of exposure to Three Arrows Capital (3AC), a Dubai-based crypto fund facing insolvency risks.

NEXO price suffers on DeFi contagion fears 

NEXO, which serves as a security token at a cryptocurrency lending platform of the same name, fell nearly 25% to $0.61 a unit, its lowest price reading since January 2021.

The massive intraday decline came as a part of a broader downside move this week, which stretched NEXO’s losses to 40%.

NEXO/USDT weekly price chart. Source: TradingView

An ongoing contagion in the crypto lending sector contributed to NEXO’s underperformance.

Traders fear that most decentralized finance (DeFi)/centralized finance (CeFi) firms, which offer high yields to clients on their cryptocurrency deposits, will default on their debts due to the wipeout of nearly $1.5 trillion from the crypto market in 2022. 

The concerns continue to mount after the collapse of Terra (LUNA) — now known as Luna Classic (LUNC) — a $40 billion algorithmic stablecoin project, in May.

A month later, Celsius Network, which offers clients up to 18% yields, paused withdrawals due to “extreme market conditions.” Its clients have pulled almost half of their assets out of the platform since October 2021, thus leaving it about $12 billion as of May 17 to meet debt obligations.

Meanwhile, 3AC, a crypto hedge fund, has witnessed liquidations of at least $400 million. In addition, on-chain data reveals that the firm may also have a minimum debt of $183 million against a collateral position of $235 million (derived in Staked Ether).

The fund could transfer the economic risks to its lenders if it becomes insolvent.

“The lenders will bear the PnL [profit and loss] difference between how much they are owed versus what they get in liquidating their collateral,” noted Degentrading, a market commentator known for highlighting the Celsius Network’s liquidation issues.

He added:

“That means defaults will cause SIGNIFICANT EQUITY erosion […] Not all lenders are made equal. Celsius is the worst. It has gone under. Nexo, I don’t know. BlockFi is pretty bad as well.”

However, Nexo says it currently has no exposure to 3AC despite partnering with the fund over a nonfungible token (NFT) lending product in December 2021. The firm asserts that the partnership with 3AC did not take off.

What’s next for the NEXO token?

Nexo has 100% liquidity to meet its $4.96 billion worth of debt obligations, according to U.S.-based audit firm Armanino. That raises the firm’s potential to avoid a liquidity crisis in the event of a rising withdrawal rate, unlike Celsius.

Nonetheless, NEXO price treads ahead under persistent bearish risks, primarily due to the crypto market’s dire state in a high-interest rate environment. The NEXO/USD pair now eyes the $0.58–$0.69 range as its interim support due to its historical significance from December 2020 to January 2021.

NEXO/USD weekly price chart. Source: TradingView

A rebound from the $0.58–$0.69 range could have NEXO bulls eye $0.883 as their interim upside target. This level was instrumental as support during the early-May price crash; it now coincides with the 0.786 Fibonacci retracement graph drawn from the $0.11-swing low to the $3.71-swing high.

Related: Is the bottom in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh in

Conversely, a decline below the $0.58-$0.69 range could have NEXO watch December 2020’s support level near $0.43, down around 35% from June 15’s price.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin and Lightning Network can save DeFi from adversity: MicroStrategy CEO

Bitcoin provides a “sound ethical, economic, and technical foundation for DeFi,” said Michael Saylor.

In light of the recent fragility in the decentralized finance (DeFi) sector, Bitcoin (BTC) maximalist and MicroStrategy CEO Michael Saylor feels that Bitcoin and the Lightning network can come to the rescue of the DeFi market.

With two enormous protocols, Terra and Celcius, facing acute difficulties within a month of each other, the DeFi sector is going through a tough time. And in a recent tweet, Saylor suggested that Bitcoin and Lightning could help stabilize the industry.

According to Saylor, Bitcoin provides a “sound ethical, economic, and technical foundation for DeFi.” He went on to say that the Lightning protocol and BTC token will be used to construct the next generation of DeFi.

Saylor was responding to a Bloomberg story on Tuesday, highlighting numerous key concerns in the DeFi field. Mahin Gupta, founder of digital-asset custody platform Liminal, told Bloomberg that:

“What is happening with Celsius will have serious repercussions for the industry. It’s a not-insignificant player, and its apparent failure will have ripple effects.”

Celsius Networks has closed down withdrawals and other transactions on its platform barely a month after the spectacular collapse of the Terra blockchain, which enticed investors with yearly returns of around 20%. The collapse of Terra, which was triggered when its stablecoin lost its 1-to-1 peg to the United States dollar, and Celsius’ halt in withdrawals have added to cryptocurrencies’ losses.

As a result, the MicroStrategy CEO has been very enthusiastic about Lightning Network, Bitcoin’s layer 2-scaling solution. According to Saylor, Bitcoin is the future of money and the Lightning protocol will aid in transaction scalability. He added that:

“If you’re going to do payments and transactions high speed, you’re going to need a base layer that’s ethically sound, economically sound, and technically sound. That’s what Bitcoin is. But then billions and billions of transactions are going to go on a layer 2 like Lightning.”

To date, DeFi applications on the Bitcoin network haven’t attained the same level of popularity as they have on other blockchains like Ethereum and Solana. Still, some people who have studied DeFi believe that it can be implemented in a sustainable manner on the Lightning Network, saying “stablecoins and fully collateralized loans against your BTC do have merit.”

Related:Bitcoin Lightning Network capacity charges through 4,000 BTC

According to the nonfungible token (NFT) project the littles creator Wil Lee, BTC and LN may give a boost of energy to DeFi and NFTs. He told Cointelegraph that while various new protocols are still in the experimental phase, protocols like BTC and LN already demonstrate their inherent strength, adding that:

“For anyone who wants to enter the crypto, stability is something they want to be sure about. When I know that an established protocol is in the picture, I’ve peace of mind, which lends strength to the overall crypto ecosystem as well. Backed by none other than BTC, your DeFi or NFT project is sure to have many more takers.”

As per Ignite’s Aliasgar Merchant, DeFi is “struggling,” and everyone is doing everything they can to make it through the crypto winter. He emphasized the recent events on Terra and Celius as proof that DeFi, which is intended to be the core of Web3, is failing. The two most important aspects of developing a solid DeFi system, according to Merchant, are interoperability and scalability. He added that “once the base is firm we can start focusing more on niche protocols to cater to our DeFi needs.”

Law Decoded, June 7–13: Lummis-Gillibrand bill is finally here

Senators confirmed that Bitcoin and Ether will be classified as commodities and regulated by the CFTC.

One can hardly name a document more long-hoped-for as the crypto bill, co-sponsored by United States Senators Cynthia Lummis of Wyoming and Kirsten Gillibrand of New York, was for the crypto community. And, it’s finally here. Last week, Lummis and Gillibrand introduced a 69-page bill in the U.S. Senate. What’s inside? The projects of study on the environmental impact of digital assets and advisory committee on innovation, a tax structure, a mandate for analysis of the use of digital assets in retirement savings and much more.

Should it become law, the bill would undoubtedly implement major changes to the current regulatory landscape. Kirsten Gillibrand and Cynthia Lummis have confirmed that Bitcoin (BTC) and Ether (ETH) will be classified as commodities and regulated by the Commodity Futures Trading Commission (CFTC). At the same time, bill authors consider most altcoins securities subject to U.S. Securities and Exchange Commission (SEC) regulations. “It will be a struggle to decipher what exactly is in the SEC bucket, but it could be the exception that swallows the rule,” a worried expert told Cointelegraph.

Legal troubles mount for Terraform Labs

Terraform Labs, the parent company behind the collapsed Terra ecosystem, continues its struggle with enforcement agencies and courts in both hemispheres. The Seoul Metropolitan Police Agency received an intelligence tip informing them of possible embezzlement of BTC by one of the firm’s employees, though not Do Kwon himself. But Kwon is still in enough trouble, as The United States Court of Appeals rejected his dispute of a subpoena by the SEC, ruling that it was served correctly.

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Bad week for Binance

Major crypto exchange Binance suffered some heavy blows last week. The SEC investigated whether Binance Holdings broke securities rules when it launched its native token BNB in an initial coin offering (ICO) five years ago. Then, Reuters alleged that Binance processed at least $2.35 billion of transactions from hacks, investment frauds and narcotics sales between 2017 and 2021. In its written statement, the company snubbed the journalists’ allegations as disinformation attempts by certain interested parties to “mislead the general public.” 

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A letter from human rights activists

Writing letters is cool once again. A week after the open letter by tech scientists against the lobbying effort of the industry comes the new one, this time from human rights activists. Campaigners from 20 countries have submitted an open letter to the U.S. Congress in support of a “responsible crypto policy” and praising Bitcoin and stablecoins as essential tools aiding democracy and freedom for tens of millions. The human rights coalition lashed out at the authors of last week’s anti-crypto letter who come from countries with “stable currencies, free speech, and strong property rights” and that they most likely haven’t experienced hyperinflation or “the cold grip of dictatorship.”

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Binance.US faces class-action lawsuit over LUNA and UST sale

The lawsuit could be the first of many for U.S.-listed crypto exchanges that offered LUNA or UST to customers.

Binance.US, the sister company of global cryptocurrency exchange Binance, is facing a class-action lawsuit from investors for the sale of LUNA and TerraUSD (UST).

A group of investors filed a class-action lawsuit in the Northern District of California on Monday, alleging that Binance sold unregistered securities in the form of LUNA and UST to investors and mislead them into buying them.

The lawsuit was filed by law firms Roche Freedman and Dontzin Nagy & Fleissig on behalf of several investors who lost their money during the recent LUNA and UST collapse.

The lawsuit alleged that Binance.US is not registered as a broker-dealer in the United States and thus clearly violates U.S. securities laws. The plaintiffs in the case accused the crypto exchange of knowingly promoting a flawed project in which the parent company had invested earlier.

The lawsuit filing pointed out that the crypto exchange not only supported and promoted the security token, but its parent company also listed the second version of LUNA 2.0 after the failure of the first.

Related: Binance ends support for anonymous Litecoin transaction

The lawsuit also accused the crypto exchange of false advertising, pointing toward its claims of UST being fiat-backed, which was redacted after the collapse.

An excerpt from the lawsuit read:

“Binance U.S.’s failure to comply with the securities laws, and its false advertisements of UST, have led to disastrous consequences for Binance U.S.’s customers.”

The plaintiffs in the case have demanded a trial by jury for all charges that are deemed trialable. Binance didn’t respond to Cointelegraph’s request for comments at press time.

Kyle Roche, founder of Roche Freedman, had earlier requested LUNA investors to contact the firm in case they bought LUNA on any of the leading crypto exchanges in the United States. Thus, the lawsuit against Binance could be the first of many.

While investors in South Korea filed a lawsuit against the founders of the Terra project the same week it tanked, the latest case against Binance.US is the first in America. Looking at the earlier tweet of the law firm involved in the lawsuit, other U.S.-registered crypto exchanges might face similar lawsuits in the near future.

Binance’s legal trouble continues to mount in the U.S. as the lawsuit comes at a time when the Securities and Exchange Commission is already investigating its BNB initial coin offering from 2017.

Do Kwon dismisses allegation of cashing out $2.7B from Terra (LUNA), UST

The rumor surfaced after a Twitter thread by @FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

Do Kwon, the CEO and co-founder of the infamous Terra (LUNA) and TerraUSD (UST) ecosystems, refuted the claims of cashing out $80 million every month for nearly three years. 

Numerous unconfirmed reports surfaced on June 11, claiming Kwon’s participation in draining liquidity out of LUNA and UST before the crash to purchase US dollar-pegged stablecoin such as Tether (USDT).

Rumors about Kwon cashing out LUNA and UST reserves surfaced after a Twitter thread by @FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

However, the entrepreneur advised the crypto community to steer away from fueling the rumor until it was proven true:

“This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.”

Sharing his side of the story, Kwon stated that the recent rumor of cashing out $80 million per month contradicts the claims that he still holds most of his LUNA holdings, procured during the airdrop. Moreover, Kwon further reiterated that his income over the past two years has only been a cash salary from TerraForm Labs (TFL).

Kwon told the community that “spreading falsehood” adds to the pain of all LUNA investors, remarking that:

“I didn’t say much because I don’t want to seem like playing victim, but I lost most of what I had in the crash too. I’ve said this multiple times but I really don’t care about money much.”

Related: Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate

Mr. B, a developer from Anchor Protocol, a Terra-centric sub-ecosystem, allegedly warned Kwon about the unrealistic high-interest rates. Mr. B said that the platform was designed only to offer an interest rate of 3.6% for keeping the Terra ecosystem stable, but was changed to 20% just before the release:

“I thought it was going to collapse from the beginning (I designed it), but it collapsed 100%.”

The developer allegedly suggested to Kwon about lowering the interest rates but the request was refused. Do Kwon has been summoned to attend a parliamentary hearing on the matter in South Korea in mid-May.

Do Kwon dismisses allegation of cashing out $2.7B from LUNA, UST

The rumor surfaced after a Twitter thread by FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

Do Kwon, the CEO and co-founder of the infamous Terra (LUNA) and TerraUSD (UST) ecosystems, refuted the claims of cashing out $80 million every month for nearly three years. 

Numerous unconfirmed reports surfaced on Saturday, claiming Kwon’s participation in draining liquidity out of Luna Classic (LUNC) and TerraUSD Classic (USTC), before the crash to purchase United States dollar-pegged stablecoin such as Tether (USDT).

Rumors about Kwon cashing out LUNA and UST reserves surfaced after a Twitter thread by FatManTerra shared the alleged details on how Kwon, along with Terra influencers, managed to drain funds while artificially maintaining the liquidity.

However, the entrepreneur advised the crypto community to steer away from fueling the rumor until it was proven true:

“This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false.”

Sharing his side of the story, Kwon stated that the recent rumor of cashing out $80 million per month contradicts the claims that he still holds most of his LUNA holdings, procured during the airdrop. Moreover, Kwon further reiterated that his income over the past two years has only been a cash salary from TerraForm Labs (TFL).

Kwon told the community that “spreading falsehood” adds to the pain of all LUNA investors, remarking that:

“I didn’t say much because I don’t want to seem like playing victim, but I lost most of what I had in the crash too. I’ve said this multiple times but I really don’t care about money much.”

Related: Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate

Mr. B, a developer from Anchor Protocol — a Terra-centric sub-ecosystem — allegedly warned Kwon about the unrealistic high-interest rates. Mr. B said that the platform was designed only to offer an interest rate of 3.6% for keeping the Terra ecosystem stable but was changed to 20% just before the release:

“I thought it was going to collapse from the beginning (I designed it), but it collapsed 100%.”

The developer allegedly suggested to Kwon about lowering the interest rates but the request was refused. Do Kwon has been summoned to attend a parliamentary hearing on the matter in South Korea.