Terraform Labs (TFL) CEO Do Kwon and his venture capitalists manipulated Mirror Protocol’s DeFi project and defrauded retail investors. An analyst under the pseudonym FatManTerra came to this conclusion.

🧵👇 Here’s a deep dive into the chain data that suggests TFL’s ‘decentralized’ exchange Mirror Protocol is a charade designed to enrich Do Kwon/VCs while manipulating governance and disrupting retail. Thank you for being so bad at hiding chain moves, Do. 🧵👇

— FatMan (@FatManTerra) 25 May 2022

It identified the Ethereum wallet in which smart contracts are launched for profitable farming in Mirror Protocol. The expert linked the address to the Wormhole cross-chain bridge owned by Jump Trading.

FatManTerra stated that at some point the address has a dominant stake in the Mirror liquidity pool on Ethereum.

“Thus, they received most of the rewards in MIR tokens, allowing them to have a disproportionate impact on management decisions,” the analyst said.

FatManTerra claims to have addressed this wallet and associated distributed assets to give the illusion of decentralized protocol governance.

The expert stated that one of the addresses sent assets to the dao5 organization, where Kwon is his official advisor.

Here’s a fun little bonus piece. One of the above addresses (https://t.co/Dgz46MjBXU) bridged over money to this Ethereum address (https://t.co/ETy7vBUqw3) with the ENS name “dao5.eth”. What’s this? (12/19) pic.twitter.com/UYF5DdBV5t

— FatMan (@FatManTerra) 25 May 2022

FatManTerra believes all these addresses have open access to substantial capital, citing multi-million dollar transactions in Mirror synthetics and other assets in the Terra ecosystem. As an example, he cited a transaction of 750 million UST.

Combining the data, the analyst concluded that “TFL and its affiliates covertly control much of Mirror’s management authority without any proper explanation.”

“Furthermore, it appears that TFL and Jump are working hand in hand to move capital out of the Mirror ecosystem without fair disclosure to retail investors, where the protocol is being offered as a fair, decentralized alternative to stock market savings,” FatManTerra said.

According to him, the findings confirmed much of the information provided to him on the condition of anonymity by the former Jump Trading employee.

Recall, the media learned that Kwon was one of the co-founders of the crashed algorithmic stablecoin Basis Cash (BAC).