Terraform Labs co-founder, Do Kwon, has disputed the significance of leaked Slack messages, arguing that they have been taken out of context. The messages in question reveal a dialogue between Kwon and fellow co-founder Daniel Shin, where they contemplate strategies to attract investors by manipulating transactions.
Crafting Attractive, Yet Deceptive Transactions
The leaked conversations, dated September 2019, were included in recent court filings by the United States Securities and Exchange Commission (SEC). These messages suggest that Kwon planned to fabricate transactions appearing legitimate to lure investors to Chai Corporation—a payment provider co-founded by Kwon and Shin in mid-2019. With phrases like “I can just create fake transactions that look real,” Kwon implies a secretive plan, intending to gradually phase out these transactions as Chai develops.
Defense Claims Misinterpretation of Evidence
Kwon’s defense team contends that the messages were misconstrued. Instead of discussing the fabrication of Chai transactions, the lawyers assert that Kwon and Shin were exploring the possibility of staking LUNA tokens with validators. The defense accuses the SEC of misrepresenting evidence to prejudice Kwon, undermining the credibility of their case and seeking to support their “spurious claim” with irrelevant evidence. The legal team continues to oppose the SEC’s extradition request for Kwon, citing it as "impossible" given his ongoing detention in Montenegro following a passport fraud conviction.
