Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
The world of cryptocurrency has seen its fair share of scams and controversies, but few have been as devastating as the collapse of TerraUSD and Luna, which lost nearly ₹3.5 lakh crore in 2022. At the center of this storm was South Korean entrepreneur Do Kwon, who has now pleaded guilty to conspiracy to defraud and wire fraud. In this blog post, we’ll delve into the story of Do Kwon, his rise to fame as the ‘Crypto King’, and the consequences of his actions.
Who is Do Kwon?
Do Kwon is a South Korean entrepreneur and blockchain developer who co-founded Terraform Labs, the company behind the TerraUSD (UST) and Luna cryptocurrencies. Before his fall from grace, Kwon was hailed as a genius and a visionary, with many calling him the ‘Crypto King’. He was known for his charismatic personality, his ability to pitch his ideas confidently, and his knack for convincing investors to back his projects.
The Rise of TerraUSD and Luna
TerraUSD (UST) was a stablecoin, designed to maintain a stable value relative to the US dollar. It was marketed as a safer alternative to traditional cryptocurrencies, which are known for their volatility. Luna, on the other hand, was a separate cryptocurrency that was designed to be used as a reserve asset to back UST.
In theory, the combination of UST and Luna was supposed to create a self-sustaining ecosystem, where UST would be pegged to the value of Luna. However, things didn’t quite work out as planned. In May 2022, the value of UST began to plummet, and the entire system began to collapse. The collapse was so rapid that it wiped out nearly ₹3.5 lakh crore in investor wealth.
The Investigation and Charges
In the aftermath of the collapse, Do Kwon and his company, Terraform Labs, faced intense scrutiny. In August 2022, Kwon was charged with conspiracy to commit wire fraud and wire fraud, among other charges. The charges were brought by the US Department of Justice, and Kwon was accused of using his position to manipulate the market and defraud investors.
Plea and Potential Sentence
Last week, Do Kwon pleaded guilty to all the charges brought against him. The plea deal is significant, as it could potentially reduce Kwon’s sentence from 25 years in prison to 12 years. The exact sentence will be determined by the court at a later date.
The Consequences of Kwon’s Actions
The collapse of TerraUSD and Luna had far-reaching consequences. It led to a loss of confidence in the cryptocurrency market, and many investors were left with significant losses. The incident also raised questions about the regulation of cryptocurrencies and the accountability of cryptocurrency companies.
In the aftermath of the collapse, Kwon’s reputation was left in tatters. He was hailed as a genius and a visionary, but his actions were deemed reckless and irresponsible. The incident also highlighted the need for stricter regulation of the cryptocurrency market, and the importance of accountability in the industry.
Conclusion
Do Kwon’s plea guilty to conspiracy to defraud and wire fraud is a significant development in the saga of TerraUSD and Luna. While the consequences of his actions are still being felt, his guilty plea marks a turning point in the story. As the world of cryptocurrency continues to evolve, it is essential that investors and regulators alike learn from the lessons of the past. It is only by holding individuals accountable for their actions that we can build a safer and more sustainable future for the industry.
