This week on Crypto Twitter, Terra conspiracy theories are swirling as all eyes turn to Do Kwon

Illustration by Mitchell Preffer for Decrypt

Crypto fans, fear not. The worst is over. According to seven long weeks of declines, prices finally stopped falling. However, it is unclear how long this will last.

Over on Crypto Twitter this week, Terra CEO Do Kwon stood in the dock as conspiracy theories were hurled at him and the entities he acted under during Terra’s historic collapse. Terraform Labs, the Luna Foundation Guard, and eventually Kwon himself are accused of fraud, ruthless profiteering, and tax evasion.

To get an idea of ​​the extent of the damage, consider Binance’s once-hefty LUNA investment.

2/ Binance received 15,000,000 LUNA (worth $1.6B at peak, not much now) as part of the initial ($3M) investment. 560x return at peak. It is still on the address we received at 👇. Never moved or sold.

Address: https://t.co/6HwTu6CCuB

— CZ 🔶 Binance (@cz_binance) May 16, 2022

Today, the exchange’s total holdings are worth a little less than $3,000.

Reports circulated this week that Kwon may have used his nonprofit, the LUNA Foundation Guard, to save whales by moving massive amounts of bitcoin to Binance and Gemini, thereby buying UST from them at near face value ( Jan $) at a time when UST was worth around $0.60 on the secondary markets.

On Tuesday, Twitter user FatMan, who claims to be affiliated with Terra’s research forum, accused Kwon of siphoning off LUNA’s success by paying out hundreds of millions of dollars.direct from the LUNA market cap” in recent years “to pay the salaries and operating costs of Terra employees”.

🧵👇 Do Kwon and Terraform Labs cheated retailers out of hundreds of millions of dollars *that they currently have*. It came out of the pockets of LUNA and UST holders and into their wallets.

Here’s why you should be angry, and here’s what you can do about it. 🧵👇

— FatMan (@FatManTerra) May 17, 2022

Later in the week, FatMan asked Kwon if reports in the Korean press were true: Is Terra currently being hunted down by South Korean tax authorities over $78 million? Kwon cleared the air.

We have no outstanding tax liabilities in Korea

The NTS conducted a tax audit of all major crypto cos with a presence in Korea and applied Korean tax legislation to foreign parent companies and in the end every company paid – we paid in full

Not unique to TFL

– Mach Kwon 🌕 (@stablekwon) May 21, 2022

Kwon also said South Korean authorities “creatively invoiced millions of crypto companies” to recover from a pandemic-driven recession, and Terra has complied to the last penny.

Understand why this would be interesting to look for gossip, but not sure if it’s relevant to anything going on

The Korean government needed money to prop up Covid spending, has creatively billed millions of crypto companies, and we’ve paid our cut in full – all that entails

– Mach Kwon 🌕 (@stablekwon) May 21, 2022

The Terra creator then answered some pressing questions from the community including why he doesn’t want to to take the advice of many – including Binance CEO Changpeng Zhao – and burn most of LUNA’s post-death spiral stash of 6.5 trillion essentially worthless tokens.

Many accused Kwon of an elaborate rugpull after two days of silence at the height of Terra’s demise, but his slightly improved responsiveness and transparency seems to have been regained by FatMan on Saturday.

I understand. Well thanks for the explanation. My apologies if I misinterpreted this as I tend to view Cointelegraph as a fairly authoritative source. For the sake of accuracy, I shared your statement as well. And for the record, I totally believe you.

— FatMan (@FatManTerra) May 21, 2022

Still, the heat is still on Kwon for a while. Doo Wan Nam, chief operating officer of blockchain research and investment firm StableNode, tweeted that South Korean Terra investors are now filing criminal and civil lawsuits against Kwon over alleged fraud.

$LUNA and $UST Korean investors have sued Do both civilly and criminally for fraud. They also requested an order for a temporary seizure (freeze) of his assets.

They are represented by the law firm LKB & Partner.

— Doo | StableNode @Lisbon (@DooWanNam) May 18, 2022

The aftermath of Terra’s collapse also had wider implications for the crypto industry as a whole. Now people want to know if other stablecoins, like Tether, are actually backed to the last dollar. After all, this has been debated several times.

@paoloardoino

With all due respect sir, when $USDT Report?

We’re scared because of them $UST collapse and the market wants spot #Bitcoin ETFs.

Regulators, institutions, and crypto investors await your response as to whether or not USDT worth $75 billion is fully backed.

— Ki Young Ju (@ki_young_ju) May 17, 2022

FTX CEO Sam Bankman-Fried believes audits and oversight are key to protecting consumers in the future.

Agree 100% — let’s bring oversight audits to stablecoins so we can protect consumers and bring clarity to the industry. https://t.co/xBq3T6hTeI

— SBF (@SBF_FTX) May 17, 2022

Elsewhere

Outside of the industry-wide Terra autopsy, a few other notable things happened on Crypto Twitter this week. First off, Salvadoran dictator Nayib Bukele wants you to know that his government is still bullish on Bitcoin. What Bukele fails to mention is that he currently has $34 million in the hole from his Bitcoin investment. Smile through the pain, Bukele!

Tomorrow, 32 central banks and 12 financial authorities (44 countries) will meet in El Salvador to discuss financial inclusion, the digital economy, unbanked banking, the #Bitcoin Rollout and its benefits in our country.

— Nayib Bukele (@nayibbukele) May 16, 2022

On Friday, someone attempted to discredit World of Women NFTs by claiming that the collection’s PFP portraits were inspired by images of murdered women. The prosecutor’s “evidence” is dubious and essentially rests on an alleged and totally unproven romance between artist/WoW project founder Yam Karkai and sex cult leader Keith Raniere.

a terrible day in NFT country. If we go down like this, I decide to accelerate

Here is a thread check @worldofwomennft is inspired by images of murdered women in their final days with the artist @YKarkai connected directly to NXIVM cult leader Keith Raniere

1/🧵 pic.twitter.com/4Td9w9KJX3

— Coasey (@CoaseyX) May 20, 2022

Why would this person pull World of Women like that? An account called CryptoRock provided a plausible explanation.

This is a Milady holder upset about the Coindesk article exposing people behind Miladys… So you’re saying if we go down like this I choose to “accelerate”… I’m to 95% sure this is entirely fabricated to try to make fun of the Milady article.

– CryptoRock 🌏 (@CryptoMoonRock) May 20, 2022

Finally, those who want to know Ethereum creator Vitalik Buterin’s net worth now have a bit more clarity. He’s not a billionaire (anymore).

(btw I’m not a billionaire anymore)

— vitalik.eth (@VitalikButerin) May 20, 2022