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. Kwon, the co-founder of Terraform Labs, was behind the cryptocurrencies TerraUSD (UST) and Luna, which suffered a massive collapse in 2022, wiping out nearly ₹3.5 lakh crore (approximately $40 billion) in value.
The 31-year-old entrepreneur, who was facing up to 25 years in prison, has admitted to his role in the fraud and may see his sentence reduced to 12 years. The guilty plea was made in a US district court in Brooklyn, New York, according to a report by the Hindustan Times.
TerraUSD (UST) and Luna were once among the most popular cryptocurrencies, with UST serving as a stablecoin pegged to the US dollar. However, in May 2022, UST lost its peg, causing a massive sell-off that led to a downward spiral in the value of Luna. The sudden collapse of the two cryptocurrencies sent shockwaves throughout the cryptocurrency market, with investors worldwide losing millions of dollars.
The collapse of TerraUSD and Luna was not only a financial disaster but also had far-reaching consequences for the global cryptocurrency market. The incident led to a significant decline in investor confidence, with many crypto enthusiasts questioning the viability of the entire industry.
Do Kwon’s guilty plea comes as a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. The US Department of Justice had charged Kwon and five other individuals with conspiracy to commit wire fraud and securities fraud.
In a statement, the US Attorney’s Office for the Eastern District of New York said, “Do Kwon and his co-conspirators allegedly deceived investors and the public about the stability and security of TerraUSD and Luna, causing significant harm to those who invested in these cryptocurrencies.”
The investigation into the collapse of TerraUSD and Luna has been ongoing for several months, with authorities seeking to determine the extent of Kwon’s involvement in the fraud. The guilty plea marks a significant development in the case, with Kwon’s admission likely to have significant implications for the cryptocurrency industry as a whole.
The collapse of TerraUSD and Luna has raised concerns about the regulatory environment surrounding cryptocurrencies. Many experts have called for greater oversight and regulation of the industry, citing the lack of transparency and accountability that contributed to the collapse of the two cryptocurrencies.
In the aftermath of the collapse, several investigations were launched, including one by the US Securities and Exchange Commission (SEC). The SEC had accused Kwon and his co-conspirators of violating securities laws by failing to register the sale of TerraUSD and Luna as securities.
The guilty plea by Do Kwon marks a significant victory for the US authorities, who have been seeking to hold accountable those responsible for the collapse of TerraUSD and Luna. The case serves as a warning to other cryptocurrency entrepreneurs and investors, highlighting the need for transparency, accountability, and regulatory compliance in the industry.
In conclusion, the guilty plea by Do Kwon, the ‘Cryptocurrency King’, marks a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. The case serves as a reminder of the risks and consequences of fraud and deceit in the cryptocurrency industry, and highlights the need for greater oversight and regulation to protect investors and maintain public trust.
