Accidental Terra drop leads to smear campaign, community member says

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Terraform Labs (TFL), the company behind defunct algorithmic stablecoin TerraUST (USTC), and its co-founder Do Kwon are back in the limelight for allegedly waging a smear campaign and making threats against one of the members of their own community.

It all started in May with the genesis airdrop which was planned after the original ecosystem implosed following its stablecoin depeg. TFL, in a Twitter thread, claimed that Jimmy Le, a community member in charge of Terra community funds, refused to return funds earned from the genesis airdrop.

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The thread noted that the newly created token, now called LUNA, was airdropped to people holding the original native token (now called) LUNAC. However, an error regarding the CW3 multi-signature wallets resulted in individual signers of these multi-signatures receiving LUNA airdrops, which they should not have.

TFL claimed that all of the other multisig singers fired the accidental drop except for Jimmy and despite their best efforts, he has yet to cooperate with them.

5/ All Ozone and Interchain Incentives multi-signature signers have since returned 100% of the $LUNA they received during the Genesis airdrop when technically possible – with the exception of Jimmy.

— Terra powered by LUNA (@terra_money) January 5, 2023

Jimmy, the individual accused of not returning the accidental dump, responded to the TFL tweet thread on January 9 and accused them of waging a smear campaign against him. He said the company deliberately chose to present one version of the story and also lied about their interactions. He claimed that at no time did he refuse to make the airdrop accidental but wanted to make sure of the tax implications due to the tokens he received.

Related:10 Crypto Tweets That Aged Like Milk: 2022 Edition

He also clarified that he transferred the liquid portion of the airdrop (approximately $1-1.5 million) to the specified multisig TFL, and none of the tokens airdropped were ever delegated or sold. But later, he discovered that the chain upgrade did not reset his acquire balances in the community pool, but rather allowed the manual transfer of acquire tokens to the community pool. This caused him to reconsider his tax concerns.

On August 1, 2022, I discovered that the channel upgrade did not reset my acquisition balances in the community pool, but instead enabled a feature to manually transfer acquisition tokens to the community pool. pic.twitter.com/mlXjUQGW7N

— Jimmy (@stablejim) January 9, 2023

Jimmy claimed tax conversations with the TFL continued until December 2022 before the TFL suddenly released the Twitter feed on January 6. He claimed the smear campaign caught him off guard as they worked to reach a settlement.

I was taken aback by TFL’s sudden public message that we were in the process of reaching an agreement. Since then, I have received threats from law enforcement and threats to my personal safety, which was very shocking and upsetting to me. pic.twitter.com/DvYwQk5EUZ

— Jimmy (@stablejim) January 9, 2023

He also reportedly shared personal messages from TFL co-founder Kwon threatening him with various consequences including his personal safety. One of the messages said:

“Do it right, it’s not worth the hassle and endangerment it will bring to your life and/or reputation in the future. That’s all I’ll say more on the subject. I will NOT be involved in your hunt. II don’t really care. I just thought I’d let you know. Good luck. You’ll probably need a lot if you try to get away.”

Jimmy’s clarification and Kwon’s alleged posts angered the crypto community, especially Fatman, a Twitter account dedicated to the Terra-LUNA fiasco.

Fatman praised Jimmy and shot Kwon, saying someone who tried to illegally sell US securities and is on the run from Interpol shouldn’t threaten others for legal and tax advice. He further added, “Don’t take Do Kwon’s financial advice. It’s always the right game.”

Cointelegraph reached out to TFL, Do Kwon and Jimmy Le for further clarification on the matter, but did not hear back as of press time.

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