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, often referred to as the ‘Cryptocurrency King’, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was the mastermind behind the cryptocurrencies TerraUSD (UST) and Luna (LUNA), which lost a staggering $40 billion (approximately ₹3.5 lakh crore) in 2022, has admitted to his role in the fraud.
For those who may not be familiar, Do Kwon co-founded Terraform Labs, a company that developed the Terra blockchain and its associated cryptocurrencies, UST and LUNA. The two cryptocurrencies gained massive popularity in 2022, with UST becoming the third-largest stablecoin in the world. However, in May 2022, a crisis unfolded when the value of UST and LUNA plummeted, causing widespread panic and losses for investors.
The collapse of the Terra ecosystem led to a massive sell-off, resulting in a loss of nearly ₹3.5 lakh crore for investors. The event sent shockwaves through the global cryptocurrency market, with many experts warning of a potential financial crisis.
Kwon’s guilty plea comes as a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. According to reports, the entrepreneur faces up to 25 years in prison for his role in the fraud. However, his guilty plea may reduce his sentence to as little as 12 years.
The charges against Kwon include conspiracy to commit wire fraud and wire fraud, which carry a maximum penalty of 20 years in prison. Additionally, he was also accused of conspiracy to commit securities fraud and securities fraud, which carry a maximum penalty of 20 years in prison.
Kwon’s legal team has argued that the entrepreneur did not intend to defraud investors and that his actions were motivated by a desire to promote the growth and adoption of the Terra ecosystem. However, prosecutors have maintained that Kwon’s actions were reckless and that he knew or should have known that his actions would cause harm to investors.
The guilty plea is a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. The event has sparked widespread outrage and calls for greater regulation of the cryptocurrency market.
In a statement, the U.S. Attorney’s Office for the Southern District of New York said, “Do Kwon’s guilty plea is a significant milestone in our investigation into the Terra ecosystem. We will continue to work tirelessly to hold accountable those who engage in illegal activities and to protect the integrity of the financial markets.”
The guilty plea comes as a relief to many investors who lost significant amounts of money in the collapse of TerraUSD and Luna. However, the event has also raised important questions about the regulation of the cryptocurrency market and the need for greater transparency and accountability.
In conclusion, Do Kwon’s guilty plea to conspiracy to defraud and wire fraud is a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. The event serves as a stark reminder of the risks and uncertainties associated with investing in cryptocurrencies and the importance of regulatory oversight.
