Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
The cryptocurrency world was recently rocked by the news that Do Kwon, the founder of Terraform Labs, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was once hailed as the “Crypto King”, was behind the cryptocurrencies TerraUSD and Luna, which lost $40 billion (approximately ₹3.5 lakh crore) in 2022.
Kwon, a South Korean entrepreneur, co-founded Terraform Labs and was responsible for creating the stablecoin TerraUSD (also known as UST) and the cryptocurrency Luna. The two assets were designed to be pegged to the value of the US dollar and the value of the stablecoin, respectively. However, the value of both assets plummeted in May 2022, causing a massive loss of value and leaving many investors devastated.
The collapse of TerraUSD and Luna led to a significant loss of trust in the cryptocurrency market, with many investors losing their savings. The incident also led to a investigation by the US Department of Justice and the Securities and Exchange Commission (SEC).
According to the plea agreement, Kwon admitted to defrauding investors by falsely claiming that the company’s stablecoin, TerraUSD, was backed by a large reserve of assets. In reality, the company did not have the funds to back the stablecoin, and the value of the currency plummeted as a result.
Kwon also admitted to wire fraud, which is the transfer of funds from one location to another without the knowledge or consent of the receiver. In this case, Kwon used the funds to pay for personal expenses and to repay debts.
Kwon could face up to 25 years in prison for his crimes. However, his plea agreement may reduce his sentence to 12 years.
The collapse of TerraUSD and Luna has led to a significant backlash against the cryptocurrency industry. Many investors are now being more cautious when investing in cryptocurrencies, and there is a growing concern about the security and stability of the cryptocurrency market.
The incident has also led to a lot of speculation about the future of the cryptocurrency market. Some experts believe that the incident will lead to a decrease in the popularity of cryptocurrencies, while others believe that the incident will lead to a more regulated and stable cryptocurrency market.
In conclusion, the news of Do Kwon’s guilty plea has sent shockwaves through the cryptocurrency world. The incident highlights the importance of regulation and oversight in the cryptocurrency industry.
