How Do Kwon Cashed Out .7 Billion – Explanation by FatMan

How Do Kwon Cashed Out $2.7 Billion – Explanation by FatMan

A member of the Terra Forum Research community shared on his Twitter how Do Kwon managed to cash out about $2.7 billion. There was an earlier claim that he cashed out $80 million a month before the collapse of LUNA and UST.

The SEC conducted video interviews with Terra employees. They stated that Do Kwon was sending $80 million each month to different wallets.

By the way, Do Kwon himself categorically denies everything, according to him for two years his only income was only a nominal salary from TFL, and that most of the tokens he just put aside.

Some of you thought $80 million a month was bad. But it’s nothing. Before Kwon cashed out $2.7 billion (33 times that $80 million!). And that’s in just a few months. And it’s all thanks to Degenbox, the perfect mechanism for withdrawing liquidity from LUNA & UST into staplecoins like USDT.

When you’re a paper billionaire, it’s hard to cash out. Draining LUNA for more than $2 billion in USDT would result in a serious market crash. Sure, Do Kwon could always use his “burn/checking” printer to pour it all into UST, but how do you cash out 2 billion UST without breaking the UST’s peg to the dollar?

All you have to do is use Abracadabra’s Degenbox, a borrowing protocol with which you can cycle to buy stabelcoins. You can borrow UST against collateral, put it in Anchor, then use the AUST you receive to borrow even more UST, put it in Anchor again… It’s Anchor on steroids.

Attracted liquidity by creating a tempting APY. Terra Influencers began advertising this strategy en masse. Thousands of retail investors began filling Degenbox to generate high returns. And while this began to quickly deplete the profitability reserve, threatening Anchor’s long-term sustainability, Do Kwon didn’t care.

It created incredibly dense, almost immobile liquidity at the top of the peg zone (the $0.98 to $1.00 dollar range). In short, it would allow someone to cash in billions of UST in exchange for MIM at a 1:1 rate without breaking the peg – all thanks to inorganic demand.

Here’s the total amount of MIM that Do Kwon was able to cash out through the MIM/UST pool without even breaking the peg! And no need to dump LUNA or UST on the exchanges – he has gained enough liquidity from all of you.

He was saying that the future was in UST. He called, decentralized money safe. He said there would be no UST depeg. “Centralized Stablecoins will shave you.” So why did he cash out $2.7 billion from UST into USDT and USDC? Were all his words a lie? (Spoiler alert: yes.)

Here are TFL’s outgoing transactions. $558 million on KuCoin, $1.08 billion on Binance, $545 million on Huobi. You get the idea. All that money is liquidity that has left the Terra ecosystem, exacerbating the collapse and supporting TFL’s coffers. And all this while lying right to everyone’s face.

Perhaps with the extra $2.7 billion in liquidity pools, UST wouldn’t have canceled the tie-up a month ago. Perhaps without the constant lies, retail investors wouldn’t have lost so much.

Requirements for the company:

  • Explain the purpose of these deals;
  • Publish a PDF report with sources of LFG funds
  • Publish logs of transactions and counterparties that were made for “depeg protection.”
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