Tuesday, June 6, 2023

Market Rumor: Do Kwon Allegedly Scammed Investors Via Mirror Protocol

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A new Market rumor, alleges that Do Kwon actually used Mirror Protocol to allegedly scam retail investors by selling MIR tokens so let’s read more today in our latest cryptocurrency news.

A Terra analyst and source of several whistleblower leaks, FatManTerra spread a market rumor that Mirror Protocol is a fraudulent project designed to make Do Kwon money while manipulating governance and screwing over retail. The analyst identified a wallet via Etherscan which deployed the Mirror Protocol yield farming smart contract and the wallet created the smart contract 0xdb27 which the analyst alleges to be a part of the Terra wormhole infrastrcuture and a liquidity pool for the Mirror Protocol.

The contract seems to be acting as an LP pool for some protocol but at this time, we can’t confirm nor deny that it belongs to Mirror Protocol. FatMan Terra outlined that this wallet:

“owned most of the Mirror LPs on Ethereum. They thus farmed most of the MIR rewards, which would allow them to have a disproportionate say in governance decisions.”

The wallet is listed as one of the top 20 MIR wallets and the data matches the analysts’ next accusation:

“I have found evidence that this wallet and related wallets try very hard to make it look like MIR governance is not majority-controlled by a single entity – they do so by splitting up MIR between several fresh anonymous wallets.”

The MIR held in the wallets identified in the Twitter thread is all staked and gives them more voting power in the MIR governance when combined. FatManTerra identified a few wallets that interacted by bridging the tokens across the wormhole and transferring assets from ethereum to Terra and purchased $750 million tranches of UST and spread MIR on multiple wallets similarly to the described wallets. FatManTerra alleged that someone with high levels of capital and access to LP Contracts was spreading the MIR tokens on multiple wallets and making the protocol seem more decentralized.

Terra’s MIR Protocol, mirror, price,

The accusation is damaging to the reputation of Mirror Protocol but the next part of the thread changes the direction of the accusation. The analyst suggested that one of the wallets was tracking the sent tokens to a DAO address for which Do Kwon is an advisor. He described how MIR funds incorporated in the web of wallets were transferred to Binance and KuCoin to get sold ont eh open market. The accusations can be traced by reviewing the data, he claims:

“corroborates much of what the employee currently working at Jump told me.”

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