Terraform Labs co-founder Do Kwon has refuted the significance of Slack messages as evidence, which involved discussions with his co-founder Daniel Shin about manipulating transactions on the Terra blockchain to attract investors.
The United States Securities and Exchange Commission (SEC) included the Slack conversation between the two co-founders, which was dated back to September 2019, in a recent court filing.
The message report suggests the two co-founders were brainstorming strategies to increase investor interest in the Terra blockchain. However, Kwon intended to shape transactions to make them more attractive:
“I can just create fake transactions that look real.”
Kwon further elaborates that these transactions will generate fees and can be gradually phased out as Chai grows.
Kwon then appears to attempt to make a pact with Shin to keep the plan confidential. “I wont tell if you wont,” he stated.
He further asserted that it will be challenging for individuals to uncover the manipulation tactics.
“All the power to those that can prove its fake,” he states, adding that he will be making every effort to prevent the scheme being exposed:
“Because I will try my best to make it indiscernable.”
However, Kwon refutes the evidence against him, alleging it was taken out of context.
His legal team claim that Kwon and Shin spoke about the possibility of staking LUNA tokens with validators, rather than creating counterfeit Chai transactions:
“Finally, the SEC misstates evidence in its gratuitous effort to prejudice Mr. Kwon in a procedural motion having nothing to do with the merits (or lack of merit) of the SEC’s case.”
“In other words, the SEC’s motion relies on misrepresentations about irrelevant evidence to support its spurious claim that it has been unable to get discovery from Mr. Kwon,” Kwon’s lawyers added.
Related: Do Kwon converted illicit funds from LUNA to Bitcoin: S.Korean prosecutors
Meanwhile, Kwon’s lawyers are pushing a US federal court to reject the SEC’s request to extradite him to the US over the collapse of the Terra ecosystem.
Kwon’s legal team declared the request as “impossible” due to him being detained in Montenegro with no scheduled release date after being found guilty of passport fraud.
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