Binance cryptocurrency exchange CEO Changpen Zhao, or CZ, asked an internal investigation team to look into Terra user FatMan’s allegations against Terraform Labs founder Do Kwon and the project team.
As it turns out, he has always opposed the idea of a UST algorithmic stackablecoin and Do Kwon’s plan to revive UST and LUNA tokens. Moreover, Binance has been cautious in listing the new LUNA token, adding it in the “innovation zone” for high-risk tokens.
In a June 1 interview with Fortune, speaking about Binance’s support for Terra 2.0, Zhao said he had read FatMan’s tweets accusing Do Kwon and the Terra project, which prompted him to initiate his own investigation.
FatMan alleged that Terra manipulated markets by paying exchanges and third parties, causing people to lose billions, engaging in insider trading, tokenomics adjustments, hiding financial data in Kernal Labs cloud storage and tax evasion.
He also criticized Terra for the organization’s failure to compensate small investors and people who lost money because of the UST Stablecoin crash.
According to CZ, Binance has always cooperated with law enforcement to help uncover fraud:
Based on the data we have, if we draw any conclusions, we will have to share them with law enforcement. To date, we cannot confirm or deny any allegations.
The Basis Cash algorithmic stackcoin failure surprised CZ, so he asked his team to improve the due diligence process.
I can’t even believe that Binance once advertised the mentioned stabilecoin as a safe investment.