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Do Kwon allegedly siphoning $80 million per month from the Terra project

The allegations claim that Do Kwon withdrew hundreds of millions of dollars from the Terra ecosystem before it collapsed.

Terra employees told Securities and Exchange Commission (SEC) investigators that Do Kwon was withdrawing $80 million a month before LUNA/UST collapsed.

A month has passed since the UST lost its rate to the dollar, resulting in a loss of $60 billion. During that time, many people denounced allegations of fraud and mismanagement.

Given the gravity and scale of the allegations, it is only a matter of time before authorities begin an investigation.

According to the Financial Times, South Korean authorities are investigating the company Terraform Labs over allegations of fraud. At the same time, the US securities regulator is questioning whether the marketing of the UST stablecoin violates federal investor protection rules.

“SEC attorneys are looking into whether Terraform Labs, the company behind the UST, broke the rules for securities and investment products.”

Under US securities laws, a virtual currency may be subject to an SEC investigation if a US citizen invests in the token for a profit.

Terraform Labs stated that it was unaware of the SEC investigation:

“We know nothing about the SEC probe into TerraUSD at this time — we have received no such information from the SEC and are aware of no new investigation other than the one involving Mirror Protocol. ”

@FatManTerra said the withdrawal of hundreds of millions of dollars was both a fraud and an act that directly contributed to the UST’s loss of pegs.

“Reminding that Do Kwon giving himself hundreds of millions (‘operating costs’) is not only fraud, it exacerbates the fallout, as it removes vital liquidity from Curve & LUNA (making it easy for UST to lose the peg). ”

The founder of crypto consulting platform Eight, Michaël van de Poppe likened Do Kwon to a scammer and said that “honestly, he deserves to go to jail.”

Do Kwon responded to the statements on social media on June 9 and said that false information is driving the story. He promises to make sure accurate information is released.