More money laundering proofs come against Terra’s founder.
Do Kwon and his Terraform Labs team keep getting in trouble? After the botched launch of Terra 2.0 and the LUNA airdrop, Do Kwon is now facing yet another issue that could further pit the Terra community against him. Apparently, evidence has surfaced linking Terra to money laundering.
A famous crypto analyst and Terra researcher called FatMan is at it again. FatMan has been going after Do Kwon and Terraform Lab’s jab after jab. This time around, he could be going for the ultimate knockout to put the company and its owner, Kwon, in real legal trouble.
In a recent Twitter thread, FatMan exposed what he terms a money laundering and tax evasion operation involving Terra and an apparent shell company disguised as a blockchain consultancy.
? It's time to uncover another one of Terra's dirty little secrets… A 'blockchain consultancy firm' they spun up in order to launder money and evade taxes. Let's have a look at company K. (1/8)
— FatMan (@FatManTerra) May 30, 2022
Kwon And Terraform Labs Caught Evading Tax
News of these allegations was first reported by a popular and credible Korean news agency, saying that Korean authorities are already investigating Terra.
Apparently, Terra has had a Korean-based affiliate headed by Mo Kim. Although the news agency avoided naming the company, instead of calling it “Company K,” reports now expose the said company as Kernel Labs. This company is supposedly a blockchain consultancy linked to Terraform Labs.
It turns out that Terra has been sending money disguised as service charges to Kernel Labs. According to the expose`, Terra sent $4.8 million to Kernel Labs under this “arrangement.”
Fatman writes: “Why is this interesting? Well, Korea’s tax authorities reported that Terra sent 6 billion won ($4.8m) to company K’s CEO last year. This was reported on the books as ‘other expenses.’ Hypothetically, if the two were the same, this would indicate laundering.”
Some of Terra’s patents were filed by Kernel Labs, and employees of the two companies have been working in the same offices. Kernel Labs’ CEO is a Terra developer.
This shows that the two companies are affiliated, and such transactions could amount to money laundering. To avoid this, Do Kwon has been trying to distance Terra from Kernel Labs to make the two appear unrelated.
FatMan shared evidence of this where Do Kwon amended the Terra Revival Plan to remove all references to Kernel Labs.
Now, TFL is trying to furiously scrub away their link to Kernel Labs. On May 18th, mentions of Anchor/Mirror from Kernel's site were removed. In the T2 proposal, Do hastily removed the mention, despite implying that they were partnered in the creation/maintenance of Terra. (7/8) pic.twitter.com/NfQX11qAZ8
— FatMan (@FatManTerra) May 30, 2022
Not The First Case
While this is the first time Do Kwon and Terra have been caught laundering money, it’s not the first time they’ve been caught evading tax in South Korea. The Korean tax authorities have already slapped Terraform and Kwon with close to $80 million in fines for tax evasion. Terra is also currently under investigation in South Korea after the collapse of UST and Luna.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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