Dunamu, the operator of Upbit, South Korea’s biggest crypto exchange, has moved to distance itself from connections with Terraform Labs’ terra (previously LUNA, now – LUNAC) – dismissing notions that its management “may have invested directly” in the Terra network, and labeling reports as “clearly false.” And while previous reports had claimed that a Dunamu subsidiary had invested a large chunk of its founding capital into LUNAC tokens, only to sell the coins off in February last year, the firm stated that it had not liquidated the coins for cash, but had instead swapped them for bitcoin (BTC).
In an official notice on its website, Dunamu said that it still holds all of the BTC it obtained in the 2021 trade. As reported last week, South Korean media outlets noted that Dunamu established a firm called Dunamu & Partners in March 2018. A month later, this new firm bought 20 million LUNAC (formerly LUNA) tokens, paying around USD 0.12 per coin.
Song Chi-hyung, who is also Dunamu’s Founder and Chairman, was listed as an executive director in official Dunamu & Partners’ documents. Kim Hyeong-nyeon, Dunamu’s Vice President, was also registered as an executive director.
Song and Kim stepped down from these roles shortly after the subsidiary’s founding.
Dunamu claimed, however, that neither Dunamu nor its management team were “involved in or exercised any influence over” Dunamu & Partners’ decision to make a LUNAC investment decision, but were “only” made aware of the investment through an investment report.
The firm wrote:
“Dunamu’s management and individual major shareholders have never invested in Luna. Media reports that the core management of Dunamu invested directly in Luna are clearly false.”
The firm threatened legal action against “media and other parties” who “spread false information.” Some had questioned the move, pointing to the fact that support for LUNAC via BTC pairings began on Upbit in July 2019.
The company explained that the decision to list LUNAC was not entirely its own, and came about due to Upbit’s order book sharing system with the Bittrex crypto exchange.
“Bittrex started supporting Luna trading on the BTC market on July 26, 2019. At that time, the Upbit BTC market was operating by sharing order books with Bittrex, and digital assets supported by Bittrex were also supported by Upbit, unless there was a special reason [not to list],” the firm wrote.
Dunamu further added that it “was not involved in the investment decision” and claimed that the Terra network had also received backing from the likes of Coinbase’s investment arm and Pantera Capital.
The company stated that “Dunamu & Partners continues to hold the bitcoin that have been exchanged for Luna to this day, and has never realized profits, such as converting them into cash.”
“In addition, the [LUNAC] to BTC trade too place about one year and three months ago. This is a significant period of time before the recent [price crash]. If Dunamu & Partners intended to [make large] profits through [LUNAC], there would be no reason for it to swap the coins for bitcoin,” they added.
The company further revealed details and transaction histories of four BTC addresses, each of which currently holds around BTC 520 (USD 16m). (Address 1, address 2, address 3, address 4). The company provided evidence that these addresses were the recipients of the BTC it received from the 2021 trade.
Also, this week has brought decidedly mixed news for Dunamu. The Upbit operator’s profits have plunged by almost 47% in the first quarter of the financial year when compared to the same quarter last year. Sales also fell by almost 29% in the same time period, Shina Ilbo reported.
But it appears that the company, which has recently been classified as a conglomerate by the nation’s top financial regulator, is allegedly diversifying its business beyond crypto and blockchain.
Fn News reported that Dunamu is “considering a plan” that would see it join a group of companies that is currently attempting to buy a prime piece of Seoul real estate. The firm is believed to be keen to become a “main investor” in a trust that is hoping to acquire the A+ Asset Tower, an office block in Seoul’s upscale Seocho District. The transaction is “expected to close in June,” the report noted.
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