Kwon Do-Hyung, the co-founder of TerraForm Labs, has opposed evidence presented before the court concerning a Slack conversation with Daniel Shin, a renowned businessman. The evidence was submitted by the United States Securities and Exchange Commission (SEC) to support that Do Kwon engaged in manipulative business activities.
After retrieving past messages involving business deals undertaken by Do Kwon, the SEC, came across a Slack conversation between the two. The regulators shared screenshots of the message where the troubled crypto entrepreneur outlined the strategies to attract a larger clientele.
Review of Do Kwon Past Messages with Daniel Shin
Among the strategies Do Kwon proposed involved manipulating activities to deceive the public. The SEC discovered that the conversation under questioning took place in September 2019.
Based on the shared screenshots, the two investors engaged in meaningful dialogue to determine effective strategies that draws investors’ interest in Chai Corporation, an entity owned by Shin and Kwon. The report indicated that Chai Corporation was owned by the two investors in 2019, aiming at providing payment solutions to South Korean customers.
According to the SEC, in the early stages of the startup, Do Kwon had proposed to create falsified transactions that could attract investors. The Slack messages indicated that Do Kwon planned to leverage his expertise to make the fake transaction appear real.
Do Kwon Manipulative Scheme
In the report, Kwon intended to incorporate transaction fees that could later be eliminated after Chai Corporation has attained the growth stage. The message indicated that Shin and Kwon agreed to put the deal in code to maintain confidentiality.
In his admission, Kwon assured his former business partner that the manipulative tactics would remain unknown to the investors. The co-founder of TerraForms vowed to do his best to mask the manipulative scheme.
In 2020, Kwon and Shin’s manipulative scheme materialized, propelling Chai Corporation towards the direction that attracts success. Later the two investors agreed to part ways later in 2020 to invest in other viable ventures. Kwon focused on improving the Terra Ecosystem by hyping his stablecoins LUNA and UST.
Lawyers Describes SEC Evidence as Irrelevant
In his September 29 report, Kwon described the SEC Slack messages as evidence drawn out of context. Subsequently, Kwon’s legal team dismissed the SEC claims that their client engaged in manipulative activities concerning Chai Corporation.
They underlined that the dialogue between Kwon and Shin revolved around ways to introduce validators in staking LUNA. On a defensive note, the lawyers blamed the SEC for misrepresenting evidence in the attempt to take legal action against Do Kwon.
The legal team described the SEC Slack message as irrelevant and inaccurate. They lamented that the claims submitted by the SEC supported their previous evidence against Do Kwon. The recent evidence presented by the SEC came days after Do Kwon opposed the request to be extradited to the US for questioning.
Do Kwon Opposes SEC Extradition Request
The SEC had requested a court in Montenegro to bring Kwon to the US for further questions concerning the fallout of the Terra ecosystem. The lawyer representing the embattled crypto investors stated that SEC extradition efforts were impossible and could lead to a violation of due process rights.
In September 2022, the South Korean authority requested the international crime unit Interpol to list Do Kwon in the red alert list. After unfruitful efforts to bring Do Kwon to justice, the South Korean authority urged regulators to cancel Kwon’s travel documents to restrict his movement.
In March this year, Do Kwon was arrested at an airport in Montenegro with forged travel documents. The Montenegro law enforcers claimed that Kwon attempted to board a flight to Dubai with his colleague.