Terra cofounder Do Kwon is the one who is pumping Bitcoin

[bbc.reporter]

@Sir Legend. We should begin to become more skeptical about Do Kwon and the purpose of his $10 billion bitcoin buy announcement, I reckon. Was it to hype bitcoin? This did not work. Was it to hype Terra? That did not work also. Will Terra hold $10 billion in bitcoin in their treasury? Where will this $10 billion come from? By printing UST? However, Terra will only print UST if there is demand in Terra's Luna token.

It appears being a contrarian where the market is bearish, I want to be bullish has made me become less skeptical and more of a hypeman.

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[bbc.reporter]

There are rumors that Do Kwon and the supporters of Terra's stablecoin UST might be in danger of depegging. There are also some who are speculating that those supporters, I assume Jump Crypto, 3 Arrows Capital and Defiance Capital are selling Bitcoin and Ethereum to support the peg of UST.

I have not yet made any of the research, however, I saw this tweet. I will share more updates tomorrow.



Algostable $UST about -0.34% off peg with some rather large curve swaps starting to unbalance the pool. Be careful out there.

$UST forced itself into the majority of DeFi and crypto, so if it depegs >2% then the entire space is going to take a massive hit.

Source https://mobile.twitter.com/7ommyzero/status/1523032846339764224?s=12

[Daltonik]

LFG voted for the allocation of a loan to OTC traders in the amount of $1.5 billion (0.75B in BTC, 0.75B in UST) to ensure the binding of the TerraUSD (UST) stablecoin to the dollar in conditions of market volatility in more detail on their Twitter. https://twitter.com/LFG_org/status/1523512196965167104

Maybe that's why with their bitcoin wallet https://bitinfocharts.com/bitcoin/address/bc1q9d4ywgfnd8h43da5tpcxcn6ajv590cg6d3tg6axemvljvt2k76zs50tv4q all 42,530 BTC were moved to the following two addresses: 30,000 BTC to the Okex exchange wallet https://bitinfocharts.com/bitcoin/block/735653/1NYAd6fA2dc5xowuweFUSDRqRTEzDwk28 and 12,530 BTC to the address https://bitinfocharts.com/bitcoin/address/bc1qslcc7cjghgg7dkyzjaj3jn6l9z6wr0rj9zpwhd7prhc8z2hraafstvq6jn

[bbc.reporter]

@Daltonik. Is it a loan or have they dumped $750m of bitcoin to maintain the peg of 1 UST = 1 USD? Also, would that be enough? UST is presently $0.20 below the peg. It appears that Do Kwon will need to dump more.

https://coinmarketcap.com/currencies/terrausd/

It also appears that if Do Kwon can save UST and return the peg back to $1.00, will the cryptospace community still consider it a trustworthy stablecoin to hold?

[Wind_FURY]

@Daltonik. Is it a loan or have they dumped $750m of bitcoin to maintain the peg of 1 UST = 1 USD? Also, would that be enough? UST is presently $0.20 below the peg. It appears that Do Kwon will need to dump more.

https://coinmarketcap.com/currencies/terrausd/

It also appears that if Do Kwon can save UST and return the peg back to $1.00, will the cryptospace community still consider it a trustworthy stablecoin to hold?

Shower thought. Why didn't Do Kwon keep their reserves in the U.S. Dollar to maintain the peg? Use Bitcoin in their reserves they bought last month, to sell them less than the buying price to defend the peg this month doesn't make logical sense. They should keep their reserves in cash.

[bbc.reporter]

@Wind_FURY. Agreed. Do Kwon and Terra's decision to use bitcoin as the reserve gave the exploiting whales a reason to attack UST's peg. It is presently speculated that there was a whale that has shorted an amount of $4 billion at $42k and also has bought $1 billion in UST before beginning his attack.

The attacker began selling some UST in Binance that started it to depeg to $0.97 and Do Kwon reacted by selling bitcoin to defend the peg. It started a rumor and the whale used all his UST to cause the panic where it caused UST to depeg to a low of $0.65. Do Kwon was forced to dump more bitcoin to defend the peg.

[Wong Gendheng]

I'm curious about what happened to Terra to drop more than 90% this week, and for Terra USD why 1 Terra is only 50 cents? Is there a big negative news that happens with Terra? Or will they migrate to another network?

[Daltonik]

The price continues to decline LUNA on binance is already trading at less than $5, while UST has fallen to $0.27 and continues to decline, theblock reports that LFG is looking for investors to raise more than $ 1 billion for support, but it seems to me this amount will not be enough.

[Wind_FURY]

Another shower thought. Can this be considered what they call a "Black Swan" event? Or were there enough amount of people who saw this Ponzi to crash like this because they knew how it actually worked? I admit that I was wrong for having the opinion that HODLing Bitcoin in Terra's reserves would a benefit for Terra. What it actually did was be a dis-benefit for Bitcoin because they are required to sell to maintain the peg.

[stepwilli]

I mean they had a bit of a fall but they "basically" recovered from there haven't they? But, they are still not at 1 dollar, they are at above 90 cents which is a big achievement if we are considering how they were under 70 cents just today.

This should be an example of how to make money basically, just because many people lost hope and considered this a dead project and how it was gone, the owners took it higher again and if you did buy a lot, you would have profited a lot as well. I understand the logic of not being too much trusty with everyone in the crypto world considering how they constantly scam each other, but this wasn't one of them.

[bbc.reporter]

Much fud, speculations and other news being shared in social media and other information being published in bitcoin news media. The news is Do Kwon was behind another stablecoin project that failed according to Coindesk. There are some members of the Luna community who are beginning to speculate that this is another rugpull.



Do Kwon, the CEO of Terra creator Terraform Labs, was one of the pseudonymous co-founders behind the failed algorithmic stablecoin Basis Cash, CoinDesk has learned.

Basis Cash (BAC) was a closely watched revival in decentralized finance (DeFi) circles when it launched on Ethereum in late 2020, just before the launch of terraUSD (UST), Terra’s flagship stablecoin. Like UST, BAC sought to maintain a $1 peg through code, not collateral.

But it failed: The token of this long-abandoned project never achieved its target of dollar parity, sank below $1 in early 2021 and was trading well below 1 cent on Wednesday.

Source https://www.coindesk.com/tech/2022/05/11/usts-do-kwon-was-behind-earlier-failed-stablecoin-ex-terra-colleagues-say/



There are also some groups mentioned that this attack on UST was by Alameda Research, Citadel, 3 Arrows Capital and Justin Sun was also mentioned.

[Kemarit]

^^ Well if this is true then probably this is well planned by Do Kwon on whoever is behind Terra and it's stable coin.

They have a history already and it seems that they have a blue print so they just follow it to the T and make a perfect cover up in the beginning, let everyone know that they are going to pump BTC, giving false hope and now it is crumbling bring down bitcoin with them.

[Paul Pogba]

A few days Terra dropped more than 90% and now the price of Terra is only 33 cents, it seems that investors don't believe anything with the Terra project and create a big panic, is it because the Terra drop then has an impact on the market in general? I'm still wondering if Terra can get up again.

[STT]

Not a black swan, more like Murphy's Law where the nature of the market is to test everything to destruction something I would guess Satoshi kept in mind.
   Thats a heck of a drop, seems to be a bit of a mess.   Does this resemble the crypto equal to the LTCM blowup of the late nineties where some Noble prize winners trying to arbitrage the market with various trades that unfortunately unfolded dramatically.    I didnt realize the wider implications but some people rely on the stable coin thing way too much where as I always regarded it as a bit wobbly and opaque

Thats about a negative a headline as they can muster:
https://www.coindesk.com/layer2/2022/05/11/do-kwon-is-the-elizabeth-holmes-of-crypto/

[Don Pedro Dinero]

Shower thought. Why didn't Do Kwon keep their reserves in the U.S. Dollar to maintain the peg? Use Bitcoin in their reserves they bought last month, to sell them less than the buying price to defend the peg this month doesn't make logical sense. They should keep their reserves in cash.

I was thinking the same thing, but we realise it now. I saw the news a while ago and didn't think about it. But it is logical that in view of what has happened it would have been better to have had dollars.

I guess the underlying idea was that the dollar is devaluing, and by leaps and bounds lately, while bitcoin is a good hedge against inflation.

[bbc.reporter]

This might only be the beginning unless investors are given their money back. There is a report that 2 people have started going to Do Kwon's apartment to break in and to harrass his family. This is scary for Do Kwon, I only hope for the safety of his family and some compensation for the investors.



Police are investigating a report that an unknown person visited the home of Terraform Labs CEO Kwon Do-hyung and rang the doorbell. CEO Kwon's spouse requested the police to designate a person for emergency personal protection.

According to the police on the 13th, the Seongdong Police Station in Seoul received a report that an unidentified person broke into an apartment in Seongsu-dong, Seongdong-gu, and rang the doorbell at around 6:23 pm the day before.

Source https://m.mt.co.kr/renew/view.html?no=2022051308574726920&type=outlink&ref=%3A%2F%2F

[Kemarit]

^^ Sounds very familiar to me, I mean years ago, literally decades when we have a pyramiding scheme here in our country. So lots of people started to put their money on it including high ranking police officers. And when it the scheme was about to crumble, there were reports that this general is sending policemen to the house of the leader of the scheme and harassing the family.

Anyhow, this is scary for Do Kwon and his family but not sure if the police are going to investigate or protect him because a lot of people have lost money investing on Terra, just saying.

[bbc.reporter]

@Kemarit. This is much more different, however. Terra Luna and UST were supported as part of the cryptospace's bluechip ecosystem. The concept of algorithmic stablecoins was something that was going to bring everything more independent from fiat currencies. I reckon as an idea it is something the cryptospace very much needs, however, the implementation is clearly much harder to make.

In any case, the intruder who went to Do Kwon's home talked to news reporters and said that he lost $2.3 million in Luna and UST. This might be clickbait. The reporters should ask if $2.3 million is being valued when Luna was more than $100 per token or if is investment started with $2.3 million.



“I have lost about 2 to 3 billion won (US$2.3 million)
Suspect told reporters

He spoke to the reporters following the Seongdong police station investigation. The suspect also urged Kwon to take up full responsibility for the downfall. He used to operate an online broadcasting channel. The suspect claimed that many had taken their own lives amidst the fall of the stabelcoin.

Source https://watcher.guru/news/suspect-who-invaded-terra-founder-do-kwons-home-reveals-his-motive

[takuma sato]

I was never too convinced that this algorithmic approach to keep a stablecoin stable would work, not only because trusting some algorithm to buy and sell without human supervision involved can end up in a problem but the fact that all these tokens are based on centralized (non-Bitcoin) blockchains, in this case LUNA is an ERC20 token and you can't even sync a full ETH node, should be enough to not trust this.

[bbc.reporter]

From the founder who was pumping bitcoin to the scammer who has dumped everything he pumped hehe. Do Kwon will certainly go to prison for this. He is trying to fix the project by proposing a fork, however, the damage has been done. This cannot be fixed. It can only be fixed in the eyes for those investors who lost money if Do Kwon is convicted and to be banned from making new projects.



The collapse of the tokens linked to the Terra ecosystem, stablecoin terraUSD (UST) and Luna (LUNA), has led to some major investors coming clean and detailing their losses. Two more backers of Terra are disclosing exactly how their balance sheets have been affected.

Publicly, Hashed has said that it is “financially sound” and Hashed Ventures hasn't been affected by the crisis.

All in all, Hashed’s losses amount to over $3.5 billion using pricing data from early April.
Local media in South Korea report that more than 200,000 investors in the country hold Terra-related tokens.

Source https://www.coindesk.com/markets/2022/05/19/terra-backers-delphi-digital-and-hashed-lick-their-wounds-after-ust-and-luna-collapse/



There are also startups that have began scamming their own customers for UST yields in Anchor hehehe.

Yikes. @stablegains
 took USDC and USD via wire from customers promising them 15%, put it all into Anchor without telling them, and skimmed 4% off the top. They have now changed the denominations in their app from USD to UST and are nuking the landing page & old terms.

These guys are in deep trouble - they lost about $42m in funds from 4,878 customers and probably have no way to pay it back (they're a small startup) because they went all in on Anchor's invincibility. Conviction bets are great, but not when toying with people's savings.

Source https://mobile.twitter.com/fatmanterra/status/1527153694218797058?s=12&t=i0uLuE5dnP0wxx9wTxDuew




The government of South Korea has brought back their special financial crimes unit to investigate Terra. This financial crimes unit were also used to investigate IPO scams in the stock market.

A specialized financial crimes unit has been tasked with investigating last week’s collapse of the Terra blockchain’s main cryptocurrencies while founder Do Kwon faces hefty tax fines, according to South Korean media reports.

Source https://www.theblockcrypto.com/post/147606/south-korea-investigates-financial-crimes-crypto-terra-luna-kwon-crash



South Korean lawmakers want Do Kwon for questioning. It appears that the proposed Luna fork might only be something for Do Kwon to make it appear that he is trying to fix the damage.

Earlier today, the de-pegging of UST was taken all the way to the National Assembly’s Political Affairs Committee at a plenary meeting. During the meeting, discussing the damage the network had caused to several individuals, Rep. Yoon Chang-hyeon, a member of the ruling party urged the government to bring in Do Kwon for questioning.

Source https://watcher.guru/news/heres-how-much-trouble-terra-do-kwon-is-in-following-usts-demise