Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
In a shocking turn of events, South Korean entrepreneur Do Kwon, who was once hailed as the “Crypto King” for his role in creating the popular cryptocurrencies TerraUSD (UST) and Luna, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, the co-founder of Terraform Labs, faced up to 25 years in prison for his alleged crimes, but with his guilty plea, he may be able to reduce his sentence to 12 years.
For those who may not be familiar with the story, TerraUSD and Luna were two cryptocurrencies that were touted as revolutionary new forms of money. UST was a stablecoin, designed to be pegged to the value of the US dollar, while Luna was a cryptocurrency that was meant to be used as a reserve currency to back UST. The two cryptocurrencies were extremely popular, with UST becoming the third-largest stablecoin in the world and Luna becoming one of the top 10 cryptocurrencies by market capitalization.
However, in May 2022, the TerraUSD and Luna ecosystems collapsed, causing a loss of nearly $40 billion (approximately ₹3.5 lakh crore) in value. The collapse was catastrophic, wiping out the life savings of thousands of investors and leaving many more in financial ruin.
The collapse of TerraUSD and Luna has been attributed to a series of events, including a bank run on UST, which caused the stablecoin to lose its peg to the US dollar. This, in turn, caused a massive sell-off of Luna, which further exacerbated the crisis. The collapse was so severe that it sparked a global cryptocurrency crash, with many other cryptocurrencies losing significant value.
The investigation into the collapse of TerraUSD and Luna was led by the US Department of Justice, which alleged that Kwon and his co-conspirators had engaged in a scheme to defraud investors and manipulate the market. The investigation found that Kwon and his co-conspirators had used a complex system of transactions and accounts to conceal the true nature of their activities and to avoid detection.
Kwon and his co-conspirators were charged with conspiracy to commit wire fraud, which carries a maximum sentence of 25 years in prison. However, with his guilty plea, Kwon is likely to face a significantly reduced sentence.
The guilty plea is a significant development in the case, as it marks the first time that one of the key players in the collapse of TerraUSD and Luna has admitted to wrongdoing. The plea deal is also a significant blow to Kwon’s reputation, which was previously untarnished.
The collapse of TerraUSD and Luna has had far-reaching consequences for the cryptocurrency industry as a whole. Many investors who lost money in the collapse are still reeling from the loss, and the incident has raised questions about the regulation of cryptocurrencies and the risks involved in investing in them.
The incident has also had significant consequences for Kwon personally. He has lost a significant amount of money and has been forced to abandon his lavish lifestyle. He has also been stripped of his status as a cryptocurrency mogul, and his reputation has been forever tarnished.
In conclusion, the guilty plea of Do Kwon is a significant development in the case of the collapse of TerraUSD and Luna. While it may bring a sense of closure to those who were affected by the collapse, it is also a reminder of the risks involved in investing in cryptocurrencies and the importance of regulation in the industry.
Source:
