Ruholamin Haqshanas
Amidst the ever-evolving Terra saga, a pseudonymous Terra validator has leaked the full chat logs of the telegram group where members of Terraform Labs, including Do Kwon and most major validators, discussed the UST crisis and talked over the path forward. The chats are available from May 12, when the validator joined the group.
On the surface of it, the chat shows that there was a lot of confusion, uncertainty, and a clear lack of leadership. However, it also shows that there was also some shady decision-making behind the closed door.
Terra Validators’ Messy Telegram Chats
THORmaximalist is the pseudonymous Terra validator who leaked the Telegram chats. “In the spirit of transparency, here are the chat log from the main telegram war room,” the validator said on Twitter, before sharing snapshots and exporting HTML readable files of the chats.
Chats show that at one point on May 12, Viktor Bunin, OG Protocol Specialist at Coinbase Cloud, asked what could happen if they waited another two days. “Well, for one thing, the whale with beth staked in anchor and shorting UST will be locked there for two days, so if the market nukes,” Do Kwon responded, the investor would lose their money without actually addressing the question.
The chats also show that introducing a new stablecoin to LUNA 2.0 was a part of the long-term plan while restructuring the blockchain or creating a new Layer 1 that would compensate holders with equity was part of the medium-term plan. More specifically, a crypto-backed algorithmic stablecoin, which was introduced in a paper by IOHK, the company behind Cardano, was suggested to be included in the new LUNA chain.
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More Accusations Against Terra
While the chats show the messy process of events that led to the launch of LUNA 2.0, they also reveal that the team was not always transparent about everything. As pointed out by the pseudonymous Terra researcher FatMan, the Terraform Labs (TFL), the developer of the Terra blockchain, ostensibly knew about the blockchain halt while claiming otherwise.
“This will be interesting since TFL has publicly said nobody knew about the halt before it happened, but these chats prove a lot of people knew. Was still in the process of matching up the big LUNA buys/stakes to the validator wallets.”
In a Twitter thread, the researcher also listed some other allegations against Do Kwon and the TFL. They said that CHAI, a mobile payments app powered by Terra’s blockchain network, had no real users despite Do Kwon claiming that the app was being used by major Korean merchants. “It was a scheme for TFL to launder money out,” they added.
FatMan also claimed that the LFG funds were only controlled by the TFL, while Kwon had publicly said multiple times that the funds were held on a multisig wallet controlled by seven directors. “In fact, only TFL controlled the wallet, and Do Kwon pulled out the last batch of coins without a board vote,” they said.
The researcher also claimed that wallets controlled by the TFL have received over 3.3% of the LUNA 2.0 supply, currently worth over $230 million. Do Kwon had told the community that TFL-owned wallets would not receive any tokens and that LUNA 2.0 would be a community chain.
“The community must band together as a force and call out these vultures when their lies arise. Let there be consequences. Let there be transparency. Let there be justice. Every lie, every scam, is a stain on our beloved space and brings us one step further from our aims.”
It is worth noting that a major South Korean law firm aims to sue Do Kwon on behalf of ordinary investors who lost all their funds during the spectacular crash of UST.
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About the author
Ruholamin Haqshanas is an accomplished crypto and finance journalist with over two years of experience writing in the field. He has a solid grasp of various segments of the FinTech space, including the decentralized iteration of financial systems (DeFi), and the emerging market for non-fungible tokens (NFTs). He is an active user of digital assets for remittances.
