Terra accidental airdrop leads to smear campaign, community member claims

Published at: Jan. 10, 2023

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

It all started in the month of May with the genesis airdrop that was planned after the original ecosystem imploded in the wake of its stablecoin depeg. TFL, in a Twitter thread, claimed that Jimmy Le, a community member entrusted with Terra community funds, has refused to return funds gained during the genesis airdrop.

The thread noted that the newly minted token, now called LUNA, was airdropped to individuals holding the original native token (now called) LUNAC. However, an error with regard to CW3 multi-sig wallets resulted in individual signers of these multi-sigs receiving LUNA airdrops, which they should not have.

TFL claimed that all other multisig singers returned the accidental airdrop except for Jimmy and despite their best efforts, he is yet to cooperate with them.

5/ All Ozone and Interchain Incentives multi-sig signers have since returned 100% of the $LUNA they received in the Genesis airdrop where technically possible -- except for Jimmy.

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

Jimmy, the individual accused of not returning the accidental airdrop, responded to the TFL tweet thread on Jan. 9 and accused them of running a smear campaign against him. He said the firm has deliberately chosen to present one side of the story and has also lied about their interactions. He claimed that at no point he refused to return the accidental airdrop but wanted to make sure about the tax implications because of the tokens he had received.

Related: 10 crypto tweets that aged like milk: 2022 edition

He also clarified that he transferred the liquid portion of the airdrop (around $1 to 1.5 million) to the multisig TFL specified, and none of the airdropped tokens has ever been undelegated or sold. But later, he found out that the chain upgrade did not reset his vesting balances to the community pool but rather enabled the manual transfer of vesting tokens to the community pool. This made him revisit his tax concerns again.

On August 1, 2022, I discovered that the chain upgrade did not reset my vesting balances to the community pool, but rather enabled a feature that enabled manual transfer of vesting tokens to the community pool. pic.twitter.com/mlXjUQGW7N

— jimmy (@stablejim) January 9, 2023

Jimmy claimed that tax-related conversations with the TFL continued until December 2022 before TFL suddenly posted the Twitter thread on Jan. 6. He claimed that the smear campaign caught him off guard as they were in the process of a settlement.

I was caught off guard by TFL's sudden public post because we were in the process of reaching an agreement. Since then, I have received threats of law enforcement action and threats to my personal safety, which has been very shocking and distressing to me. pic.twitter.com/DvYwQk5EUZ

— jimmy (@stablejim) January 9, 2023

He also allegedly shared personal messages from TFL co-founder Kwon threatening him with various consequences, including personal safety. One of the messages read:

"Just make it right, it's not worth the hassle and endangerment this will bring to your life and/or reputation going forward. That's all I'm gonna say anymore on the subject. I will NOT be involved in hunting you down btw. I don't care that much. Just thought I'd give u heads up. Good luck. You'll prob need lots of it if you try to abscond."

The clarification from Jimmy and the alleged messages from Kwon riled up the crypto community, especially Fatman, a Twitter handle dedicated to the Terra-LUNA fiasco.

Fatman lauded Jimmy and took a potshot at Kwon, saying that someone who tried illegally selling US securities and is on the run from Interpol should not threaten others for getting legal and tax advice. He added further, "don't take financial advice from Do Kwon. It's always the right play."

Cointelegraph reached out to TFL, Do Kwon and Jimmy Le to get more clarification on the issue but didn't get a response at the press time.

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