7 ms·

Do Kwon converted illicit funds from LUNA to Bitcoin

109 points by solalf 3y ago

eric-hu 3y ago
The most interesting part to me is at the bottom: > What was initially thought to be a market-triggered event turned out to be a clear case of fraud, with former CEO Kwon at the epicenter. According to on-chain data, In the 3 weeks leading up to the depeg of the TerraUSD (UST) stablecoin, one entity dumped over $450 million of UST on the open market. Four days after the last sale, UST started collapsing. The entity behind the massive dump was none other than Terraform Labs.
- wslh 3y ago
  It is great then that in this case blockchain transactions are so transparent: it will take longer to research a fraud if involves standard banks around the world. I assume that if Do Kwon was smarter he would perform transactions more difficult to trace. Not saying that he is not smart but it self-confidence kills many fraudsters.
  - 3np 3y ago
    Using privacy tools wouldn't necessarily be the smarter move as they could be taken as the smoking gun of someone trying to hide their tracks because they are aware of the problematic aspects.
    - wslh 3y ago
      There are strategies that Do Kwon could use to cover its tracks, that was the point.
      - kataklasm 3y ago
        And parent was saying that if done improperly the usage of such tools might be taken as a linguistic "smoking gun". So rather than risking that Kwon might have preferred doing it overtly, hoping for plausible deniablity in doing so.
        wslh 3y ago
        Stronger that "plausibility deniability" is being no linked to the facts. Do Kwon had virtually unlimited resources for a good plan. My observation from the field (not knowing Kwon but other fraudsters) is that there is an overconfidence based on power. It falls like a house of cards when official prosecutors are involved. It works when everything is handled privately.
        deleted 3y ago
        [deleted]
  - nwah1 3y ago
    Standard fraud at standard banks is about as easy to trace, or easier, and there is no underlying utility to these crypto scam protocols. So touting the traceability is a red herring.
    - anecdotal1 3y ago
      The FBI reports about blockchain analysis I've read contradict this statement. Banks are only easier if all entities involved are certain American banks.
- daniel-thompson 3y ago
  I saw that as well and agree. This might be obvious to someone who's been following this more closely than I have, but why would Terraform Labs trigger their own collapse? Was it just an attempt to exfil the money and run?
  - khochesh_kushat 3y ago
    Isn't that how all rug pulls work? The insiders time getting out, triggering a crash but extracting as much as they can.
    - hgsgm 3y ago
      Right. If there are a billion fauxllers worth half a billion dollars, you want the half a billion dollars attached to your own half a billion fauxllers, and not the other half.
camillomiller 3y ago
So the saviors that would lead us to our shiny post-monetary future are ruthless conmen whose sole purpose is getting richer at the expense of everyone else. Paint me surprised.
- im3w1l 3y ago
  Conmen latch on to every trend. Figuring out who they are is probably the primary reason we evolved intelligence.
  - deleted 3y ago
    [deleted]
  - maxbond 3y ago
    In a world before intelligence, who is conning us in order to apply evolutionary pressure, and how are they doing so? It seems to me like you need to be an intelligent creature among other intelligent creatures and to have a theory of mind in order to be a con artist, because cons work by turning someone's intelligence against them.
    - pcrh 3y ago
      In that vein, I remember reading somewhere a proposal that the force driving the evolution of human intelligence was human-to-human competition, since humans don't need as much intelligence as they have to out-smart any other species.
      - maxbond 3y ago
        Not my field of study but my initial reaction is skepticism since human communities have always been cooperative and humans have always been reliant on one another. I'd also think that you'd evolve complex displays like peacocks or powerful weapons like rams to compete with each other, intelligence seems more useful to cooperate with each other than to compete. Eg, organizing to take down a mammoth by forcing it over a cliff isn't so much about outsmarting the mammoth as much as understanding the situation your team is in and what you should be doing. Building traps capable of trapping entire herds[1] involves outsmarting them in a sense, sure, but it also involves coordinating a large construction project. I've heard the hypothesis that creatures with a highly varied diet need more intelligence to distinguish between poisonous and nonpoisonous food. If I had to guess, for whatever my speculation is worth, intelligence evolved because we had to be highly cooperative in a rapidly changing environment as the glaciers retreated. And also that animals are much more intelligent than we often credit them for, so it was probably a smaller leap then we might imagine. [1] https://en.m.wikipedia.org/wiki/Desert_kite https://en.m.wikipedia.org/wiki/Desert_kite
nikanj 3y ago
I haven’t been this shocked and surprised since the sun rose from the east this morning. What a completely unexpected, massive plot twist
kordlessagain 3y ago
Just another human being less than humane. I’ve always thought of crypto as being the best things for machines to pay for things and one way we can put limits on them.
- hgsgm 3y ago
  How could that work? How would machines get their allowance? Why would cryptocurrency be relevant to the system?

109 points by solalf 3y ago

The most interesting part to me is at the bottom: > What was initially thought to be a market-triggered event turned out to be a clear case of fraud, with former CEO Kwon at the epicenter. According to on-chain data, In the 3 weeks leading up to the depeg of the TerraUSD (UST) stablecoin, one entity dumped over $450 million of UST on the open market. Four days after the last sale, UST started collapsing. The entity behind the massive dump was none other than Terraform Labs.

wslh 3y ago
It is great then that in this case blockchain transactions are so transparent: it will take longer to research a fraud if involves standard banks around the world. I assume that if Do Kwon was smarter he would perform transactions more difficult to trace. Not saying that he is not smart but it self-confidence kills many fraudsters.
- 3np 3y ago
  Using privacy tools wouldn't necessarily be the smarter move as they could be taken as the smoking gun of someone trying to hide their tracks because they are aware of the problematic aspects.
  - wslh 3y ago
    There are strategies that Do Kwon could use to cover its tracks, that was the point.
    - kataklasm 3y ago
      And parent was saying that if done improperly the usage of such tools might be taken as a linguistic "smoking gun". So rather than risking that Kwon might have preferred doing it overtly, hoping for plausible deniablity in doing so.
      - wslh 3y ago
        Stronger that "plausibility deniability" is being no linked to the facts. Do Kwon had virtually unlimited resources for a good plan. My observation from the field (not knowing Kwon but other fraudsters) is that there is an overconfidence based on power. It falls like a house of cards when official prosecutors are involved. It works when everything is handled privately.
        deleted 3y ago
        [deleted]
- nwah1 3y ago
  Standard fraud at standard banks is about as easy to trace, or easier, and there is no underlying utility to these crypto scam protocols. So touting the traceability is a red herring.
  - anecdotal1 3y ago
    The FBI reports about blockchain analysis I've read contradict this statement. Banks are only easier if all entities involved are certain American banks.
daniel-thompson 3y ago
I saw that as well and agree. This might be obvious to someone who's been following this more closely than I have, but why would Terraform Labs trigger their own collapse? Was it just an attempt to exfil the money and run?
- khochesh_kushat 3y ago
  Isn't that how all rug pulls work? The insiders time getting out, triggering a crash but extracting as much as they can.
  - hgsgm 3y ago
    Right. If there are a billion fauxllers worth half a billion dollars, you want the half a billion dollars attached to your own half a billion fauxllers, and not the other half.

camillomiller 3y ago

So the saviors that would lead us to our shiny post-monetary future are ruthless conmen whose sole purpose is getting richer at the expense of everyone else. Paint me surprised.

im3w1l 3y ago
Conmen latch on to every trend. Figuring out who they are is probably the primary reason we evolved intelligence.
- deleted 3y ago
  [deleted]
- maxbond 3y ago
  In a world before intelligence, who is conning us in order to apply evolutionary pressure, and how are they doing so? It seems to me like you need to be an intelligent creature among other intelligent creatures and to have a theory of mind in order to be a con artist, because cons work by turning someone's intelligence against them.
  - pcrh 3y ago
    In that vein, I remember reading somewhere a proposal that the force driving the evolution of human intelligence was human-to-human competition, since humans don't need as much intelligence as they have to out-smart any other species.
    - maxbond 3y ago
      Not my field of study but my initial reaction is skepticism since human communities have always been cooperative and humans have always been reliant on one another. I'd also think that you'd evolve complex displays like peacocks or powerful weapons like rams to compete with each other, intelligence seems more useful to cooperate with each other than to compete. Eg, organizing to take down a mammoth by forcing it over a cliff isn't so much about outsmarting the mammoth as much as understanding the situation your team is in and what you should be doing. Building traps capable of trapping entire herds[1] involves outsmarting them in a sense, sure, but it also involves coordinating a large construction project. I've heard the hypothesis that creatures with a highly varied diet need more intelligence to distinguish between poisonous and nonpoisonous food. If I had to guess, for whatever my speculation is worth, intelligence evolved because we had to be highly cooperative in a rapidly changing environment as the glaciers retreated. And also that animals are much more intelligent than we often credit them for, so it was probably a smaller leap then we might imagine. [1] https://en.m.wikipedia.org/wiki/Desert_kite https://en.m.wikipedia.org/wiki/Desert_kite

nikanj 3y ago

I haven’t been this shocked and surprised since the sun rose from the east this morning. What a completely unexpected, massive plot twist

kordlessagain 3y ago

Just another human being less than humane. I’ve always thought of crypto as being the best things for machines to pay for things and one way we can put limits on them.

hgsgm 3y ago
How could that work? How would machines get their allowance? Why would cryptocurrency be relevant to the system?