Several BAYC and CryptoPunks collectors who put up their tokens as collateral backing for Ethereum loans have been unable to settle their dues. Crypto analysts believe this could mark the onset of the first major liquidation crisis in the NFT industry. BendDAO Loans and Possible Risks Rumors of a liquidation spiral began earlier this week following a post about NFT lending platform BendDAO. BendDAO is a web3 protocol that allows users to take out loans in Ethereum using their non-fungible…
Anonymous – the infamous global hacking collective – recently posted a video message targeted at Terra ecosystem co-founder Do Kwon. The group promised to work with worldwide governments in exposing the founders’ entire criminal history since entering the industry.
In Sunday’s message, Anonymous began by acknowledging the poor present state of the crypto market, and the broader economy. “We were likely going to experience some pain in the crypto industry because of the macro environment, regardless of what was happening internally,” they said.
That being said, the group emphasized that broader economic circumstances were no excuse for Do Kwon’s behavior or Terra’s collapse.
“The actions of Do Kwon, the founder of the Terra Luna ecosystem, is single-handedly responsible for scamming billions of dollars away from retail investors,” the spokesperson continued.
LUNA was a former top ten cryptocurrency in early May, but collapsed to virtually nothing due to hyperinflation by the month’s end.
This rapid supply increase occurred due to the coin’s interaction with the TerraUSD (UST) stablecoin. When it lost its peg to the dollar, the entire ecosystem fell apart, taking investors and related defi protocols with it. Across both LUNA and UST, about $45 billion in investor money was eviscerated.
Not an Accident
Anonymous does not believe the protocol’s demise was a mere accident. “There is significant evidence Do Kwon had bad intentions from the start,” they said.
The group cited a number of shady details uncovered about the founder after the collapse. For example, testimony from Terraform Labs employees to the SEC claims that Kwon cashed out $80 million in LUNA per month before the collapse. The co-founder had also founded a failed stablecoin called “Basis Cash” under a pseudonym, years before founding Terra.
Anonymous even gave Kwon flak for his overconfident attitude preceding Terra’s downfall. The founder is known for having aggressively mocked his critics over Twitter for being “poor”. He also claimed it was “entertaining” to watch crypto companies die, only days before his own protocol’s meltdown.
Given the evidence, Anonymous concluded that Kwon has “plenty” of secrets and that he’s been highly sloppy in hiding them. Therefore, the group will be joining governments in their investigation of the so-called “scammer.”
“There is no doubt that there are many more crimes to be discovered in your trail of destruction,” they warned.