Binance CEO Says The Exchange Is Currently Investigating Claims Made Against Terra.
Terra is getting in the bad books again, and this time, Binance exchange and its CEO are in the mix. There have been numerous claims leveled against Do Kwon and his team at Terra for some time now.
One character on crypto Twitter has been the most prominent of Terra’s critics. He’s been so tough on Terra that the Fortune magazine referred to his tweets while interviewing Binance CEO.
This follows an earlier expose` by FatMan about Terra. In a rather elaborate Twitter thread, the critic claimed that Terra manipulated markets and made people lose billions while paying off exchanges and other third-party facilitators. FatMan called out the president of Jump, Kanav Kariya, for being a puppet and operating a secret slack group. Next, FatMan set sights on the CEO of crypto exchange FTX, accusing him of facilitating a 30% handshake deal with Serum, which is a DEX platform, involving Jump to fleece retail investors.
He said:
“Terra VIPs like @stablekwonand@stablechenvhave created the perfect staking island for themselves where they have been earning jaw-dropping farming rewards unencumbered via insider trading, tokenomics adjustments, and barriers to entry. It’s been 3 whole weeks.”
The critic also claimed that Terra had no plans to compensate small investors who lost their funds in the Terra crash.
“CZ Has Seen”
Now, Binance CEO, CZ, has come out clearly during the interview with Fortune, saying that the exchange, him included, has been following the allegations about Terra and has moved to form an investigative team to ascertain the claims.
According to CZ, Binance isn’t ideally a police force but Within Binance, they have an investigation team that has a lot of data to get analyze and get facts from. The exchange also works closely with local enforcement agencies from all over the world where needed.
CZ said: “I did ask our team to look into each one of those allegations by FatMan. I told them to Look, based on the data that we have, and if we can draw any conclusions, we should share that with law enforcement. To date, we cannot confirm or deny any of the allegations. But we should help the community to track bad behavior down and stop it. So, we do that type of analysis.”
In an interesting twist, FatMan tweeted out a thread. This time, he claimed that Binance.US has a pretty weak process for conducting due diligence and maintaining security. Binance.US is the US-based arm of Binance exchange. The critic’s claims seemed to have been meant to dispute CZ’s claim that the Binance exchange was capable of investigating Terra.
Terra In Legal Battles
Besides the mentioned investigations involving Binance, Terraform Labs and Do Kwon are already facing mounting legal issues in South Korea. Apparently, South Korean tax authorities are looking to collect around $78 million from Do Kwon and his company in unpaid taxes.
The country’s parliament recently issued a summon to Do Kwon to appear before lawmakers and explain what led to Terra’s collapse where thousands of citizens lost money.
Also, just recently, Binance CEO himself wasn’t on good terms with Do Kwon’s plan to create Terra 2.0. First, he criticized the creation of more Luna (now Luna Classic) tokens when the crash was happening. He opined that Terra should have burned tokens to reduce supply and shore up the price. On its part, Binance took steps to suspend Luna trading. In a follow-up article, CZ called Terra’s decision to mint more tokens “The most stupid design flaw is thinking that minting more of an asset will increase its total value.”
A few days later, Binance announced its support for Terra 2.0 and the subsequent airdrop of Luna 2.0. Other exchanges supported it as well.
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