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, also known as the ‘Cryptocurrency King’, has pleaded guilty to conspiracy to defraud and wire fraud charges. Kwon, the co-founder of Terraform Labs, was behind the cryptocurrencies TerraUSD (UST) and Luna, which collapsed in 2022, wiping out $40 billion (nearly ₹3.5 lakh crore) in investor value.
The news of Kwon’s guilty plea came as a surprise to many, given the severity of the allegations against him. The 31-year-old entrepreneur faced up to 25 years in prison, but his admission of guilt may reduce his sentence to 12 years.
For those who may not be familiar with the TerraUSD and Luna saga, a brief recap is in order. TerraUSD, also known as UST, was a stablecoin pegged to the value of the US dollar. It was designed to maintain a stable value, but it began to experience significant fluctuations in value in May 2022. As the value of UST continued to plummet, it triggered a chain reaction that led to the collapse of Luna, another cryptocurrency created by Kwon.
The collapse of UST and Luna sent shockwaves through the cryptocurrency market, with many investors losing significant sums of money. The incident was widely reported and sparked a wave of criticism against Kwon and his company, Terraform Labs.
The charges against Kwon were filed in December 2022, alleging that he and his co-conspirators had engaged in a scheme to defraud investors by misrepresenting the value and stability of UST and Luna. The Department of Justice accused Kwon of using false and misleading information to convince investors to buy and hold UST and Luna, knowing that the value of the cryptocurrencies was unsustainable.
Kwon’s guilty plea marks a significant turning point in the case, and it remains to be seen how his sentence will be determined. Under the terms of his plea agreement, Kwon has agreed to cooperate with investigators and provide information about his activities and the activities of his co-conspirators.
The collapse of UST and Luna has had far-reaching consequences for the cryptocurrency market and the economy. It has raised important questions about the regulation of cryptocurrencies and the need for greater transparency and accountability in the industry.
In the aftermath of the collapse, there have been growing calls for greater regulation of the cryptocurrency market. Many experts have argued that the lack of regulation and oversight contributed to the collapse of UST and Luna, and that stricter rules are needed to protect investors and prevent similar incidents from occurring in the future.
The guilty plea of Do Kwon is a significant development in the ongoing investigation into the collapse of UST and Luna. It is a reminder that the actions of individuals and companies in the cryptocurrency market can have significant consequences for investors and the broader economy.
As the case against Kwon continues to unfold, it is likely that we will learn more about the events leading up to the collapse of UST and Luna, and the extent to which Kwon and his co-conspirators knew about the unsustainable value of the cryptocurrencies. The guilty plea marks a significant step forward in the investigation, and it is likely to have important implications for the future of the cryptocurrency market.
