Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
Do Kwon, the South Korean entrepreneur behind the cryptocurrencies TerraUSD and Luna, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was dubbed the “Cryptocurrency King” by some, co-founded Terraform Labs and faced a maximum sentence of 25 years in prison. However, with his guilty plea, his sentence may be reduced to 12 years.
The news comes as a significant blow to the cryptocurrency world, which was left reeling when TerraUSD and Luna collapsed in 2022, resulting in a loss of $40 billion (nearly ₹3.5 lakh crore). The collapse had far-reaching consequences, affecting investors and users of the cryptocurrencies around the world.
Kwon’s guilty plea was announced on May 12, 2023, in a US federal court in Southern California. According to reports, Kwon admitted to conspiring with others to commit wire fraud and securities fraud, which involved the sale of unregistered securities to investors.
TerraUSD and Luna were launched in 2019 as part of the Terra ecosystem, which aimed to provide a stable and decentralized alternative to traditional fiat currencies. The cryptocurrencies were marketed as having a unique algorithm that would maintain their value and stability. However, in May 2022, the value of both currencies began to plummet, leading to a massive sell-off and ultimately, their collapse.
The collapse of TerraUSD and Luna left many investors and users with significant losses, and sparked widespread criticism of Kwon and Terraform Labs. The incident also raised concerns about the lack of regulation and oversight in the cryptocurrency market.
Kwon’s guilty plea is seen as a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. The US Department of Justice had charged Kwon with conspiracy to commit wire fraud and securities fraud in September 2022.
Under the terms of his plea agreement, Kwon will likely face a sentence of 12 years in prison, which is significantly shorter than the maximum sentence of 25 years. However, the exact sentence will be determined by the judge at the time of sentencing.
The news of Kwon’s guilty plea has sent shockwaves through the cryptocurrency community, with many investors and users expressing relief that justice is being served. However, the incident also serves as a warning to others in the industry about the importance of transparency, accountability, and regulatory compliance.
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. While the incident has had far-reaching consequences for the cryptocurrency market, it also serves as a reminder of the importance of ethical and responsible behavior in the industry.
