Original｜Odaily

Author｜Loopy

Yesterday, the disclosure of a court document gave us a glimpse into the internal chatter of the tens-billion-dollar financial empire.

SEC court documents disclosed a Slack chat that took place in 2019 between Do Kwon, founder of Terraform Labs, and Daniel Chin, another co-founder and founder of payment application Chai.

The content shows that Do Kwon almost bluntly admitted that they had fabricated the transaction volume. In addition, more explosive melons are also hidden in it, including bombardment of peers and contempt for retail investors. The most shocking one is undoubtedly the self-revealed pre-mining of 1 billion stablecoins. Odaily takes you into the melon-eating moment and takes a quick look at what Do Kwon said.

“We can create transactions that look real”

What stands out most in the court documents is Do Kwons account of the forged transactions.

Do Kwon expressed to Chin:I can create fake transactions that look real...and that incurs fees.Chin asked what if people find out its fake, to which Do Kwon responded: If you dont tell it, I wont tell it either.

In 2019, Terra announced a partnership with Chai, a partnership aimed at streamlining payment systems through blockchain and providing merchants with discounted transaction fees. According to the official statement, this cooperation will help the Terra network handle millions or even billions of transactions.

However, the SEC wrote in the filing that Chai does not use the Terra chain to process and settle payments. Instead, payments were still made through traditional methods, and false transactions were copied to the Terra chain to make it appear that Terra had made a large number of payment settlements.

Daniel Shin cast some doubt on this incident, asking,Wont people find out its fake?

Do Kwon replied,So I try to make it indistinguishable.

Daniel Shin agreed, Okay, lets do a small-scale test. See what happens.

Interestingly, in addition to the fake transactions, the chat between the two also included more interesting content. This includes both the Terra project itself and gossip about other players in the industry.

“The jewel in the crown”

During the chat, Do Kwon made a side comment about Terra that didnt seem positive (he didnt say it outright).

Regarding the pledge rate, he commented, “Only thoseBelieve Terra is the crown jewel(Hashed, 1kx) and those investors who operate staking businesses (polychain)talentPledge will be made.

Financing water injection?

During the chat, Daniel Shin listed Terra’s large investors in both its Seed 1 and Seed 2 funding rounds.

From the data point of view, the total investment of large investors in the two roundsApproximately $15 million. Although small investors have not been disclosed, public information shows that the number of small investors is not large, only about single digits. Therefore, it is speculated that Terra’s seed round financing should be slightly more than 15 million but far from a significantly higher level.

The public relations release disclosed by Terra shows that the project’s seed round financing is as high as$32 million. At present, this data may be greatly watered down.

“Upbit lists all the crapcoins”

During the discussion between the two, Do Kwon mentioned that a project called Thunder is being launched on Upbit. Daniel didnt know about this project and directly asked What is Thunder?

Do Kwon answered him concisely and clearly - Berkeley University professor Elaine Shis shitcoin.

He also continued to complain: Whats wrong with Upbit?... All the garbage coins in the world are listed by Upbit, but not us.

“I pre-mined 1 billion stablecoins”

While Terra’s most famous stablecoin is the U.S. dollar stablecoin known as UST, it is much more than that. There are a huge variety of stablecoins growing on the Terra ecosystem, including U.S. dollar stablecoins, Korean won stablecoins, Mongolian Tugrik stablecoins, and more.

The most special one is Terra SDT. SDT is a stable currency anchored to the IMF Special Drawing Rights (SDR). The value of 1 SDT is stable at 1 SDR.

What’s even crazier is that Do Kwon said: “I also pre-mined 1 billion SDT for ourselves.”

Do Kwon admitted in the chat that the value of Terra is somewhat inflated. As you said, we are nowhard to proveA $3 billion valuation is reasonable, regardless of how many percent of this story (referring to Terras narrative) is actually accepted.

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Chai is a company that has a very close relationship with Terra. The company was founded in mid-2019 and shared offices and employees with Terraform until the companies split in 2020.

At present, Do Kwon’s legal team has refuted this Slack chat record as evidence. His legal team claimed:"The SEC unfoundedly distorted evidence in an attempt to harm Mr. Do Kwon in a procedural motion that had no bearing on the SEC’s merits"。"This relied on a misrepresentation of irrelevant evidence to support its false claim that it was unable to obtain evidence from Do Kwon."

Do Kwon, meanwhile, is being detained in Montenegro while his lawyers push for a U.S. federal court to reject the SECs request to extradite him to the United States.

At present, this case is still in the long judicial process, and we still don’t know the final result.

Daniel once launched a soul-searching question to Do Kwon: Is this a Ponzi scheme?

Kwon replied: Of course not, but the people are stupid, I keep telling you, the people are really stupid.