FatMan Leans Toward Do Kwon, Believes Terra Founder Did Not Transfer Any Bitcoin From The LFG

FatMan Trusts Do Kwon on 3K Bitcoin transfer issue.

Do Kwon and the LUNA Foundation Guard (LFG) have refuted claims that the LFG moved any Bitcoin in response to the South Korean arrest warrant for the Terra founder

In a tweet today, Terra founder Do Kwon denied claims by CoinDesk Korea that he tried to cash in on Bitcoin from the LFG, possibly to aid an escape from law enforcement.

According to the Terra founder, he has not used any of the alleged receiving exchanges in the last year. Furthermore, no LFG funds have been frozen by law enforcement.

“What has been probably the most surprising in all this is the amount of misinformation that gets spread,” tweeted Kwon. “There is no ‘cashout’ as alleged, i havent used kucoin or okex in at least the last year, and no funds of tfl, lfg or any other entities have been frozen.”

What has been probably the most surprising in all this is the amount of misinformation that gets spread.

There is no “cashout” as alleged, i havent used kucoin or okex in at least the last year, and no funds of tfl, lfg or any other entities have been frozen. https://t.co/E1cbKgoqQz

— Do Kwon 🌕 (@stablekwon) September 28, 2022

The LFG shared its treasury Bitcoin wallet yesterday, asserting that no Bitcoin has been moved since May. Additionally, a check on the shared wallet address shows that the account has been dormant since May 18 and has a balance of 313 BTC.

Terra Whistleblower FatMan Responds

Notably, even Terra whistleblower and vocal Do Kwon critic FatMan, who believes Kwon was complicit in the Terra ecosystem collapse, appears to side with Kwon in this instance. The whistleblower highlighted the fallible nature of chain analysis. However, the whistleblower points out that these speculations are only possible because of the lack of transparency over how the LFG used its Bitcoin reserves.

To be honest, even though I haven’t seen the “non-public” transaction evidence myself, for once, I would lean towards believing Do Kwon on this one. Chain analysis isn’t foolproof so these flows can’t be tracked with 100% certainty (unless there are some secret Binance subpoenas)

— FatMan (@FatManTerra) September 27, 2022

It bears mentioning that the LFG had amassed about $3.5 billion worth of Bitcoin in early May. This was part of an ambitious ploy by Do Kwon to back TerraUSD (UST), now TerraClassicUSD (USTC), with $10 billion worth of Bitcoin. However, following the collapse of the ecosystem just days later, LFG claims it used its reserve to recover the UST peg and failed without a breakdown of how these reserves were used despite the inquiries by the community. Notably, Binance chief Changpeng Zhao, CZ, criticized the LFG at the time for acting too late.

The Search For Do Kwon 

The South Korean investigation into Do Kwon took a new twist on Monday. Reports indicated that an Interpol red notice had been issued for the Terra founder. It came after Singapore police confirmed that Do Kwon was no longer in the country, sparking speculation that the Terra founder is on the run.

While the court of public opinion remains split on Do Kwon’s guilt or innocence, there are concerns about how the case will affect crypto in South Korea. One of the charges against Kwon is a breach of the Capital Markets Act, which implies that the government views LUNA as an unregistered security. 

On the Unchained podcast episode released yesterday, Zack Guzman, the last journalist to interview Kwon, expressed the sentiment that the Terra founder saw the Capital Markets Act as a “catch-all.” According to the journalist, Do Kwon expressed a lack of preparedness to face such charges should they be brought against him.

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