- Kwon talked about manipulating transactions to attract investors to Chai Corporation
- He rejects the chats as evidence against him, claims they were taken out of context
The US Securities and Exchange Commission (SEC) included a Slack conversation between Do Kwon and Daniel Shin, the founders of Terraform Labs, in a recent court filing. The chats date from September 2019.
Do Kwon insists on disregarding the Slack messages because they are not relevant and should not serve as evidence, Cointelegraph wrote.
Attracting investors through manipulation
Kwon and Shin talked about manipulating transactions to lure investors to buy into Chai Corporation, a Seoul-based payment processing company that they founded in the middle of 2019. Chai Corporation and Terraform Labs were housed in the same office and shared staff until splitting in 2020.
Kwon wrote that he could “just create fake transactions that look real,” adding that they would generate fees and he could gradually phase them out as Chai grew.
Making a pact
Kwon and Shin made a pact to keep the plan secret, promising each other they “wouldn’t tell.” Kwon added that investors would have a hard time uncovering the manipulation as he would do his best “to make it indiscernible.”
Chats taken “out of context”
Kwon rejects the chats as evidence against him, claiming they were taken out of context. His attorneys claim that he and Shin were actually discussing LUNA token staking with validators, not creating fake transactions. The legal team stated:
The SEC misstates evidence in a gratuitous effort to prejudice Mr. Kwon in a procedural motion having nothing to do with the merits (or lack of merit) of their case. In other words, their motion relies on misrepresentations about irrelevant evidence.
Extradition request “impossible” to fulfill
Kwon's attorneys asked the US federal court to disregard the SEC's request to extradite their client to the US to face trial over the collapse of Terra. Kwon remains in Montenegro, where he is facing trial on travel document forgery charges. His legal team claims he cannot be extradited because no release date has been scheduled.
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