Disgraced crypto mogul Do Kwon admitted to faking trading volume, court documents from the U.S. Securities and Exchange Commission show.

A September 22 SEC filing shows a text message exchange between Do Kwon and Daniel Chin, the founder of payments app Chai, where Do Kwon tells him: “I can just create fake transactions that look real…which will generate fees.”

Chin asks Do Kwon what if “people find out it’s fake,” to which Do Kwon responds: “I won’t tell if you won’t.”

Chai partnered with Do Kwon’s Terra to speed up payments. But last year, Terra collapsed and now the SEC is accusing Do Kwon of fraud. In fact, in the SEC’s lawsuit, the agency alleges that the partnership wasn’t anything like what had been marketed to users and that Terra never replaced Chai’s payment systems.

It’s was a big allegation to make considering that Chai founder Daniel Shin also cofounded Terraform with Kwon in 2018.

In 2019, Terra announced its partnership with Chai, writing in a blog post it would “rebuild the payments stack on the blockchain to simplify the legacy payment system and provide transaction fees at a discounted rate to merchants.”

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Author: Mathew Di Salvo

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