Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
The world of cryptocurrencies has been plagued by scandals and controversies in recent years, and the latest development in this regard is the guilty plea of Do Kwon, the South Korean entrepreneur behind the cryptocurrencies TerraUSD and Luna. Kwon, who was dubbed the “Cryptocurrency King” by some, has pleaded guilty to conspiracy to defraud and wire fraud.
For those who may not be familiar, TerraUSD, also known as UST, was a stablecoin that was pegged to the value of the US dollar. It was designed to maintain a stable value, but in May 2022, it lost its peg and collapsed, causing a massive loss of value and wiping out billions of dollars in investments. Luna, another cryptocurrency founded by Kwon, also suffered a significant decline in value, leading to a total loss of around $40 billion (nearly ₹3.5 lakh crore).
Kwon’s guilty plea is a significant development in the saga surrounding TerraUSD and Luna. As the co-founder of Terraform Labs, the company behind the two cryptocurrencies, Kwon faced up to 25 years in prison if convicted of the charges against him. However, with his guilty plea, his sentence may be reduced to as little as 12 years.
The charges against Kwon stem from allegations that he and his co-conspirators engaged in a scheme to defraud investors by misrepresenting the value and stability of TerraUSD and Luna. The scheme allegedly involved the manipulation of the market price of the two cryptocurrencies, as well as the use of fake trading volumes to make it appear as though there was more interest in the coins than there actually was.
Kwon’s guilty plea is a significant blow to the cryptocurrency community, which has long been plagued by concerns about the lack of regulation and the potential for fraud and manipulation in the industry. The collapse of TerraUSD and Luna was seen as a major black eye for the industry, and Kwon’s guilty plea has only added to the negative publicity.
The case against Kwon is not the only one involving the collapse of TerraUSD and Luna. Earlier this year, the US Securities and Exchange Commission (SEC) filed a lawsuit against Kwon and his co-conspirators, alleging that they had committed fraud by misrepresenting the value and stability of the two cryptocurrencies. The lawsuit also alleged that Kwon and his co-conspirators had used fake trading volumes to manipulate the market price of the coins.
In addition to the SEC lawsuit, several other lawsuits have been filed against Kwon and his co-conspirators, alleging that they had committed fraud and other wrongdoing in connection with the collapse of TerraUSD and Luna.
The collapse of TerraUSD and Luna has also had significant consequences for the broader cryptocurrency market. The market capitalization of many cryptocurrencies, including Bitcoin and Ethereum, declined significantly in the aftermath of the collapse. The collapse also led to a significant increase in the price of stablecoins, which are designed to maintain a stable value.
In conclusion, Do Kwon’s guilty plea is a significant development in the saga surrounding TerraUSD and Luna. The collapse of these two cryptocurrencies was a major black eye for the cryptocurrency community, and Kwon’s guilty plea is a reminder of the potential risks and consequences of investing in the industry.
