FatManTerra claims that Terra co-founder Do Kwon cashed out $2.7 billion from Terra over a few months, using Degenbox to drain liquidity from the ecosystem.
In his most recent tweet, he revealed that the Terra co-founder uses Degenbox to print $80 million per month from the LUNA/UST system and convert it into hard currency like USDT.
Degenbox is a lending protocol for circulating stablecoin purchases. Through it, one can pledge collateral to buy UST, deposit it into an anchor, then use aUST to borrow more UST, and repeat the process as needed.
Is Terra having more trouble?
According to the tweet, the Terra influencer promotes Degenbox to the many high-yield retail users who use it. This ensures strong liquidity at the top of the peg area, allowing “someone to cash out billions of dollars for MIM at a 1:1 ratio without disturbing the peg.”
He claims that Kwon used the protocol to cash out around $2.7 billion through the MIM/UST pool without affecting the UST peg.
Additionally, the screenshot he shared shows that Terraform Labs sent a total of $2.7 billion in USDT to three centralized exchanges — KuCoin, Binance, and Huobi. In FatMan’s view, all these funds were removed from the Terra ecosystem and caused it to collapse.
Do Kwon denies allegations
However, Do Kwon has denied the allegations.
“This should be obvious, but the claim that I cashed $2.7B out of anything is absolutely false,” he said in a follow-up tweet.
Although he did not address specific allegations in the new post, he noted that conflicting accounts are now available to the public.
Here, he is referring to earlier claims that he has not burned his Luna tokens and participated in the most recent airdrop.
According to him, the only thing he has earned over the past two years is a nominal cash salary from TerraForm Labs, and he has rejected most of the Founders Tokens.
I didn’t say much because I didn’t want to look like a victim, but I also lost most of what I had in the crash,” he added.
Earlier this week, reports emerged that the Securities and Exchange Commission was investigating Terraform Labs to check whether the company violated federal investor protection regulations.
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