Terraform Labs co-founder Do Kwon is pushing back against the United States Securities and Exchange Commission (SEC) regarding Slack messages presented as crucial evidence in an ongoing legal battle. These messages, dating back to September 2019, involve a discussion between Kwon and his co-founder, Daniel Shin, regarding potential tactics to boost investor interest in the Seoul-based payments provider, Chai Corporation.
The exposed chat reveals that Kwon and Shin brainstorm strategies to attract investors. Chai Corporation, founded by Kwon and Shin in mid-2019, had close ties with Terraform Labs until their separation in 2020. The leaked messages indicate that Kwon had plans to shape transactions to make them more appealing, stating, “I can just create fake transactions that look real.” He believed these transactions could generate fees and be phased out gradually as Chai grew. Kwon also sought confidentiality, saying, “I won’t tell if you won’t.” He expressed confidence that investors would find it challenging to detect these manipulation tactics
Nevertheless, Kwon vehemently denies the allegations against him, claiming that the messages were taken out of context. His legal team contends that he and Shin discussed the possibility of staking LUNA tokens with validators rather than creating counterfeit Chai transactions. They argue that the SEC has misrepresented irrelevant evidence to prejudice Kwon in a procedural motion unrelated to the case’s merits.
In a parallel development, Kwon’s lawyers actively oppose the SEC’s request to extradite him to the United States regarding the Terra ecosystem’s collapse. They deem the extradition request “impossible” since Kwon is detained in Montenegro due to a passport fraud conviction with no scheduled release date.
These recent revelations have spotlighted the legal battle surrounding Do Kwon and the SEC. The SEC’s reliance on the Slack messages as evidence has sparked a fierce debate, with Kwon and his legal team vehemently denying any wrongdoing and emphasizing the need for context. As the case unfolds, it remains to be seen how the court will ultimately interpret this evidence and its impact on Kwon’s legal predicament. Given the potential ramifications for the industry, the cryptocurrency community, regulators, and investors will be closely watching the proceedings.
