Former cryptocurrency tycoon, Do Kwon, has confessed to inflating trading volumes, according to official court records.
As reported by Decrypt on a Thursday, the U.S Securities and Exchange Commission (SEC) court documents reveal Kwon’s admission during a text conversation with Daniel Chin, founder of payment app Chai.
In the exchange, Kwon disclosed his ability to fabricate transactions that seemed legitimate, generating fees in the process. When asked about potential consequences if the fakery was discovered, Kwon simply responded, “I won’t tell if you won’t.”
Chai had previously collaborated with Kwon’s company, Terra, to enhance payment speeds. However, following Terra’s downfall last year, the SEC has accused Kwon of fraud. The SEC alleges that the partnership was misrepresented to users and that Terra failed to replace Chai’s payment systems as promised.
The SEC’s documentation further illuminates the relationship between Kwon’s Terraform and Chai. Kwon allegedly planned to use Chai to generate counterfeit transactions on the Terra blockchain, which would appear genuine and yield fees.
Prior to its collapse in May 2022, Kwon’s Terra was a significant crypto ecosystem with a focus on algorithmic stablecoins. It was the second most popular DeFi blockchain after Ethereum. Kwon faces multiple charges from American and South Korean authorities and remains indefinitely detained after his arrest in Montenegro earlier this year..