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Terra CEO Do Kwon denies allegations of fraud

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In his first interview after the collapse of TerraUSD (UST) and its sister token LUNA in May, CEO Do Kwon dismissed allegations of fraud and told The Wall Street Journal, “There is a difference between failing and running a fraud.”

See related article: Winning back the trust of the Terra community a tall order for Do Kwon: Experts

Fast facts

  • “I’ve been devastated by recent events and hope that all the families who’ve been impacted are taking care of themselves and those that they love,” Kwon said in the interview.

  • 30-year-old Kwon said he was personally impacted and lost most of his net worth in the crash, but that it “doesn’t bother” him since he lives “a fairly frugal life.”

  • Kwon added, “I made confident bets and made confident statements on behalf of UST because I believed in its resilience and its value proposition. I’ve since lost these bets, but my actions 100% match my words.”

  • However, investigations carried out by the WSJ found that Kwon had often “overstated the links between Terra and Chai,” a South Korean payment app started by Daniel Shin who cofounded Terraform Labs Pte. Ltd. with Kwon in 2018.

  • A Chai spokesperson told the WSJ that the startup had stopped using Terra’s technology and assets in late 2021 because of low demand.

  • But Kwon continued to cite Chai as a major use-case of Terra stablecoins in March 2022, the WSJ report said.

  • Terra and its employees are facing investigation in South Korea, the U.S., while there are lawsuits against the company, which Terra said are “meritless.”

  • Despite the current lawsuits and investigations against Terra, Kwon is confident about Terra 2.0 — “I have great confidence in our ability to build back even stronger than we once were,” he said.

  • So far, things appear bleak for the new Terra tokens — the new Luna token, which was trading at US$18.87 on May 28, is now valued at US$1.91, according to CoinGecko data.

  • Regarding Kwon’s sharp lashes on Twitter against Terra critics, he said, “Do I regret some of the things I said in the past? Yes.”

See related article: S.Korea blocks ex-Terra employees from leaving country amid investigation