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

It all started in May 2022 with the genesis airdrop planned after the original ecosystem imploded in the wake of its stablecoin depeg. In a series of tweets, TFL claimed that Jimmy Le, a community member entrusted with Terra funds, has refused to return funds gained during the genesis airdrop.

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The tweets noted that the newly minted token, Terra (LUNA), was airdropped to individuals holding the original native token, now called Terra Classic (LUNC). However, an error with CW3 multisig wallets resulted in individual signers receiving LUNA airdrops they should not have.

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

Le, the individual accused of not returning the accidental airdrop, responded to the TFL Twitter 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 lied about their interactions. He claimed that he did not refuse 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 $1-1.5 million) to the multisig wallet specified by TFL and none of the airdropped tokens has ever been undelegated or sold. But later, he discovered that the chain upgrade did not reset his vesting balances to the community pool but enabled the manual transfer of vesting tokens to the community pool. This made him revisit his tax concerns.

Le claimed that tax-related conversations with 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 because they were in the process of a settlement.

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 Le and the alleged messages from Kwon riled up the crypto community, especially Fatman, a Twitter handle dedicated to the Terra fiasco.

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

Cointelegraph reached out to TFL, Kwon and Le to get more clarification on the issue, but they didn’t respond by the time of publication.