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, dubbed by some as the ‘Cryptocurrency King’, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was behind the cryptocurrencies TerraUSD and Luna, which lost a staggering $40 billion (nearly ₹3.5 lakh crore) in 2022, co-founded Terraform Labs and faced a maximum sentence of 25 years in prison. However, with his admission of guilt, his sentence may be reduced to 12 years.
TerraUSD (UST) and Luna were two of the most popular and highly-valued cryptocurrencies in the world, with UST being pegged to the US dollar and Luna being its native token. However, in May 2022, both currencies collapsed, leading to a massive loss of value and a significant impact on the global cryptocurrency market.
The collapse of TerraUSD and Luna was so severe that it led to a widespread panic in the cryptocurrency market, with many investors losing their life savings. The incident also raised concerns about the lack of regulation and oversight in the cryptocurrency industry.
Do Kwon’s plea of guilty comes after he was arrested in Montenegro in March 2022, just days after the collapse of TerraUSD and Luna. He had been on the run for several weeks, evading authorities and hiding his whereabouts.
According to the charges filed against Kwon, he and his co-conspirators engaged in a scheme to defraud investors and manipulate the value of TerraUSD and Luna. The scheme involved creating a fake cryptocurrency called Luna, which was designed to mimic the value of Bitcoin, and then using it to back the value of TerraUSD.
The scheme was designed to make it appear as though TerraUSD was a stable and reliable cryptocurrency, when in fact it was highly volatile and prone to wild fluctuations in value. Kwon and his co-conspirators allegedly used social media and other online platforms to promote TerraUSD and Luna, touting them as safe and reliable investments.
However, the scheme was exposed when TerraUSD’s value suddenly plummeted, causing a ripple effect throughout the cryptocurrency market. Many investors who had invested in TerraUSD and Luna lost their entire investment, with some losing millions of dollars.
Kwon’s plea of guilty is a significant development in the case, as it marks the first time that he has admitted to any wrongdoing. His admission of guilt may lead to a reduced sentence, as part of a plea deal with prosecutors.
Under the terms of the plea deal, Kwon faces a maximum sentence of 12 years in prison, down from the original 25 years. He also faces a fine of up to $1 billion.
Kwon’s legal team has yet to comment on the plea deal, but it is likely that he will be sentenced in the coming weeks.
The collapse of TerraUSD and Luna and Kwon’s subsequent arrest and plea of guilty have sent shockwaves throughout the cryptocurrency industry. The incident has raised concerns about the lack of regulation and oversight in the industry, and has led to calls for greater accountability and transparency.
The case has also highlighted the risks associated with investing in cryptocurrencies, and has warned investors to be cautious and do their due diligence before investing in any new cryptocurrency or project.
In conclusion, Do Kwon’s plea of guilty to conspiracy to defraud and wire fraud is a significant development in the case, and marks a turning point in the collapse of TerraUSD and Luna. The incident has raised concerns about the lack of regulation and oversight in the cryptocurrency industry, and has warned investors to be cautious and do their due diligence before investing in any new cryptocurrency or project.
