Effective altruism fueled SBF’s ‘ridiculous’ actions at FTX: Ex-Alameda engineer
October 2, 2023 5:14 am

"No sane person would make those decisions,” says a former engineer at Alameda Research about what ultimately led to the collapse of Sam Bankman-Fried's crypto empire.

Crypto firms beware: Lazarus’ new malware can now bypass detection
October 2, 2023 3:04 am

The malware payload “LightlessCan" — used in fake job scams — is far more challenging to detect than its predecessor, warns cybersecurity researchers at ESET.

Is Uptober here? Bitcoin, Ethereum suddenly pumps, wiping $70M in shorts
October 2, 2023 12:29 am

The price of Bitcoin and Ethereum surged nearly 4% in just a 15-minute window, sparking bullish predictions for the remainder of October.

VC Roundup: Investors eyes blockchain analytics, gaming and crypto privacy
October 1, 2023 9:58 pm

Bubblemaps, CoinScan, Hinkal Protocol, and Mythic Protocol are among the latest crypto and blockchain funding deals.

Tokenization is “securitization done on steroids" — Franklin Templeton CEO
October 1, 2023 7:40 pm

Speaking at CNBC’s Delivering Alpha event, Jenny Johnson discussed how digital assets are disrupting securitization and the financial markets.

Will Bitcoin ‘Uptober’ bring gains for MKR, AAVE, RUNE and INJ?
October 1, 2023 6:03 pm

Bitcoin tends to rally in October, possibly opening the door for MKR, AAVE, RUNE, INJ and other altcoins.

FTX's Bankman-Fried Cannot Blame Lawyers in Opening Statement: Judge
October 1, 2023 4:38 pm
Sam Bankman-Fried cannot blame FTX's lawyers for its collapse or operations in his opening statements, though he can still try and make a so-called "advice-of-counsel" defense later, the federal judge overseeing his case ruled Sunday.
Microsoft to form nuclear power team to support AI: Report
October 1, 2023 4:32 pm

Microsoft is forming a new team of professionals to advance its artificial intelligence plans with Small Modular Reactors and microreactors.

Crypto synthetic assets, explained
October 1, 2023 11:50 am

A synthetic asset represents real-world assets digitally, created and traded on blockchain networks, mirroring the value and behavior of its underlying counterpart.

Do Kwon Admits to Faking Trading Volume, SEC Documents Reveal
October 1, 2023 11:47 am

Key Takeaways

  • In one leaked chat, Do  Kwon outlined his intent to use Chai to create fake transactions on the Terra blockchain
  • Kwon allegedly told his co-founder that he could create fake transactions to increase investor interest in his venture.
  • Do Kwon’s leagl team has denied the SEC accusations.

In a startling revelation, Do Kwon, the founder of Terraform Labs, has admitted to fabricating trading volume in a text message exchange with Daniel Chin, the founder of payments app Chai, as revealed in court documents filed by the U.S. Securities and Exchange Commission (SEC) on September 22.

The text messages, a critical piece of evidence in the SEC’s case, show Do Kwon telling Chin, “I can just create fake transactions that look real…which will generate fees.” When Chin raises concerns about people discovering the deception, Do Kwon responds, “I won’t tell if you won’t.”

Chai had initially partnered with Terra to streamline payment processes. However, Terra experienced a dramatic collapse last year, leading to allegations of fraud by the SEC. The agency contends that the partnership did not live up to what had been marketed to users, as Terra failed to replace Chai’s payment systems with its own blockchain.

Do Kwon Admits to Faking Trading Volume, SEC Documents Reveal

Notably, Daniel Shin, the founder of Chai, had also co-founded Terraform with Do Kwon in 2018. In 2019, Terra announced the partnership with Chai, with plans to rebuild the payments infrastructure on the blockchain and offer discounted transaction fees to merchants. The deal was anticipated to handle transactions worth millions, if not billions of dollars.

The SEC’s recent filing provides new insights into the intricate relationship between Terraform and Chai. It highlights an extensive private chat between Do Kwon and Daniel Shin during the early stages of their collaboration, where Kwon outlined his intent to use Chai to create fake transactions on the Terra blockchain. These fabricated transactions were designed to appear genuine, generating fees in the process.

Kwon’s legal team has however denied accepting the conversation as proof, arguing it’s irrelevant and taken out of context.

Terra, once a prominent player in the decentralized finance (DeFi) blockchain space, faced a significant downturn in May 2022, resulting in a bear market and multiple affiliated projects declaring bankruptcy. In the aftermath, Do Kwon faced a series of charges from both American and South Korean authorities. He was arrested in Montenegro earlier this year on charges of document forgery and remains in detention, contesting his extradition to the United States.

The SEC’s complaint against Do Kwon includes charges of conspiracy to defraud, commodities fraud, securities fraud, wire fraud, and conspiracy to engage in market manipulation. The filing alleged that Kwon made a number of “untrue and misleading statements of material fact” over the course of several years, Terra’s deceptive replication of Chai payments onto the Terraform blockchain, misleading users into believing that these transactions occurred on Terra’s blockchain when, in reality, they were conducted through conventional means is also another allegation raised by regulatory bodies.

We Use Cookies
By continuing to use our site, you accept our use of cookies