Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
The cryptocurrency world has been plagued by scandals and controversies in recent years, and the latest development is a shocking example of the devastating consequences of fraud. Do Kwon, a South Korean entrepreneur, has pleaded guilty to conspiracy to defraud and wire fraud in a US court, admitting to his role in the collapse of TerraUSD (UST) and Luna, two cryptocurrencies that lost a staggering $40 billion (approximately ₹3.5 lakh crore) in 2022.
Kwon, who was dubbed the “Cryptocurrency King” by some, co-founded Terraform Labs, the company behind UST and Luna. His admission of guilt comes as a relief to investors and regulators who have been seeking accountability for the massive losses caused by the collapse of these cryptocurrencies.
The TerraUSD and Luna fiasco was one of the most significant events in the cryptocurrency world last year. UST, a stablecoin pegged to the US dollar, lost its value and eventually collapsed, wiping out the value of Luna, which was a cryptocurrency that was used to stabilize UST. The collapse caused a ripple effect across the global financial markets, leading to a loss of billions of dollars.
Kwon’s guilty plea is a significant development in the ongoing legal battle against him. He was initially charged with 25 counts of conspiracy to commit wire and securities fraud, among other charges. However, by pleading guilty, Kwon may be able to reduce his sentence to 12 years in prison.
The US Department of Justice (DOJ) has accused Kwon of using his companies, including Terraform Labs, to defraud investors and manipulate the market. The DOJ alleged that Kwon and his co-conspirators made false and misleading statements about the stability and value of UST and Luna, causing investors to lose billions of dollars.
Kwon’s guilty plea is a significant blow to the cryptocurrency community, which has been reeling from the collapse of UST and Luna. Many investors who invested in these cryptocurrencies have lost significant amounts of money, and the collapse has led to a loss of trust in the entire cryptocurrency ecosystem.
The TerraUSD and Luna collapse has also raised concerns about the regulatory framework surrounding cryptocurrencies. Many experts have called for stricter regulations to prevent similar frauds in the future. The collapse has also highlighted the need for greater transparency and accountability in the cryptocurrency community.
Kwon’s guilty plea is a reminder that the cryptocurrency world is not immune to fraud and manipulation. As the market continues to evolve, it is essential to ensure that investors are protected from fraudulent activities and that the market is regulated to prevent such collapses in the future.
The TerraUSD and Luna collapse has also had significant implications for the global financial markets. The collapse of these cryptocurrencies has led to a loss of confidence in the entire cryptocurrency ecosystem, and many investors are now seeking safer investment options.
In conclusion, Do Kwon’s guilty plea is a significant development in the ongoing legal battle against him. His admission of guilt has brought some relief to investors and regulators who have been seeking accountability for the massive losses caused by the collapse of TerraUSD and Luna. The collapse of these cryptocurrencies has also raised concerns about the regulatory framework surrounding cryptocurrencies and the need for greater transparency and accountability in the cryptocurrency community.
