Crypto influencer Rasgard recently took to X (formerly Twitter) to shed light on the alleged wrongdoings of Do Kwon and the now-bankrupt Terraform Labs, the company behind the $40 billion collapse of the Terra Luna stablecoin project. Rasgard accused Kwon of deception and manipulation, stating that the Terraform Labs founder “always played his own game and misled people.”
This is Do Kwon.
Net worth over $3 billion.
Founder of Luna and UST, whose collapse wiped out $45 billion in one week.
Here’s the untold story behind it 🧵👇 pic.twitter.com/I4Db8k4NXk
— Rasgard (@rasgard_lodbrok) July 7, 2024
Terraform Labs, a once-prominent blockchain platform, filed for bankruptcy protection with an estimated loss of $40 billion. Rasgard’s X post details the downfall of Terraform Labs and the alleged role of its founder, Do Kwon, actions that ultimately led to a lawsuit by the U.S. Securities and Exchange Commission alleging that they misled investors and violated securities laws.
Founded in 2018, Terraform Labs secured millions in funding from prominent investors like Binance, Coinbase, Arrington XRP Capital, and Polychain Capital, quickly gaining traction in the industry. The platform launched the LUNA token and the TerraUSD (UST) algorithmic stablecoin, which was designed to maintain a 1:1 peg with the U.S. dollar through a complex mechanism involving LUNA.
Rasgard alleges that through a secret deal with Jump Trading, UST lost its peg for the first time in May 2021. Kwon allegedly misled the public by claiming that the token “automatically self-heals” by design. Furthermore, Rasgard accuses Terraform of faking transactions on the Chai payments platform to create the illusion of legitimate activity. Kwon even placed a $1 million bet on LUNA’s price and UST’s peg before the collapse.
The situation took a turn for the worse in 2022 when Anchor Protocol, a lending platform built on Terra, began reducing interest rates for stablecoin deposits, causing a mass exodus of lenders. This, coupled with other factors, led to UST losing its peg and the subsequent collapse of LUNA, sending shockwaves through the broader cryptocurrency market and leading to increased regulatory scrutiny of algorithmic stablecoins.
Following these events, Kwon allegedly transferred over 10,000 BTC into a cold wallet. More than $100 million has reportedly been withdrawn from this wallet through a Swiss bank. Rasgard further claims that Kwon moved approximately 40,000 BTC from the burn wallet to secret wallets.Kwon was later arrested in Montenegro and faces eight charges, including securities fraud, commodities fraud, wire fraud, and conspiracy. After multiple delays, Kwon and his legal team await his extradition to face trial.
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