The Leaked Slack Conversation
The embattled Terraforms Labs founder, Do Kwon, has refuted an exposed Slack message presented as evidence of his alleged engagement in perpetrating fraud. The leaked messages revealed that Do Kwon and his co-founder, Daniel Shin, were discussing exploiting transactions to attract investors to their company.
The US Securities and Exchange Commission (SEC) included the exposed conversation dated September 2019 as evidence in a recent court filing. Moreover, the online conversation between Kwon and Shin sheds light on critical discussions that could change the course of the investigation.
The co-founders’ thoughts, intentions, and strategies are captured in their deliberations, providing a unique insight into the inner workings of their minds. In addition, the evidence presented by the SEC also captures the essence of their vision, strategy, and decision-making process before the eventual collapse of the firm.
Falsifying Chai’s Appeal
The message also demonstrates their approach to developing strategies to increase investor interest in Chai Corporation, a Seoul-based payments platform founded in 2019 by Shin and Kwon. The payment platform once had a mutually beneficial relationship with Terraform, sharing office space and a talented pool of personnel until their eventual separation in 2020.
The leaked messages reveal Kwon’s plan to increase Chai’s appeal to potential investors by creating simulated transaction records. Some analysts maintain that Kwon’s determination to position Chai as an appealing prospect in the eyes of the investment community was a deliberate move to commit fraud.
In the chats, Kwon stated that the anticipated transactions will generate the needed funds, which will be phased out as Chai expands.
Also, Kwon sought to cement a secrecy pact with his co-founder by stating that he would not say a word if Shin did the same. Kwon also displayed confidence in the success of their covert strategy.
Interpreting The Conversation’s Context
According to the leaked discussion, he stated that it would be difficult for investors to detect the orchestrated manipulation. “All power to those who can prove it’s fake,” he wrote, exhibiting a strong resolve to keep the operation hidden from meddling entities.
After the SEC leaked this conversation, Kwon vehemently denied its validity, claiming that the regulator took the content of the conversation out of context. Furthermore, his legal representatives presented a compelling counter-narrative, stating that the discussions focused on staking LUNA tokens rather than orchestrating a scheme involving phony Chai transactions.
Hence, the alternative interpretation of their conversations sheds new light on the situation, calling into question the SEC’s initial assumptions. Kwon’s legal representatives are adamant that the SEC’s motion is based on distortions of evidence, a tactic designed to bolster their unfounded claim that obtaining discovery from their client has been difficult.
Meanwhile, Kwon’s lawyers oppose the regulator’s request to deport him to the US regarding the Terra ecosystem collapse. The legal team argues that such a request is fundamentally impractical, given that Kwon is detained in Montenegro without a release date.
The extradition proceedings are complicated further by Kwon’s prior conviction for passport fraud.