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, popularly 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 catastrophic collapse in 2022, resulting in losses of $40 billion (approximately ₹3.5 lakh crore).
Kwon’s guilty plea comes as a significant development in the ongoing legal proceedings against him. The entrepreneur faced a maximum sentence of 25 years in prison, but with his admission of guilt, his sentence may be reduced to 12 years.
The Rise and Fall of TerraUSD and Luna
TerraUSD (UST) and Luna were two of the most popular cryptocurrencies in the world, with UST being pegged to the US dollar and Luna being its sister token. The duo was created by Do Kwon and his team at Terraform Labs, with the aim of providing a stablecoin alternative to traditional fiat currencies.
However, in May 2022, the TerraUSD (UST) stablecoin lost its peg to the US dollar, leading to a massive sell-off of Luna, which ultimately resulted in its collapse. The consequences were catastrophic, with the value of both UST and Luna plummeting to nearly zero, wiping out tens of billions of dollars in value.
The collapse of TerraUSD and Luna sent shockwaves throughout the cryptocurrency market, with many investors losing their life savings. The incident was widely regarded as one of the most significant failures in the history of cryptocurrency.
The Legal Proceedings
In the aftermath of the collapse, Do Kwon and his co-founder, Daniel Shin, were charged with conspiracy to commit wire and securities fraud, among other charges. Kwon had been on the run since then, with his location remaining unknown.
In July 2023, Kwon was arrested in Montenegro, where he was later extradited to the United States to face trial. Throughout the legal proceedings, Kwon had maintained his innocence, but his guilty plea has brought an end to the legal ordeal.
The Sentence
According to sources, Kwon’s guilty plea could reduce his sentence from 25 years to 12 years. The exact length of his sentence will be determined by the court during his sentencing hearing.
Kwon’s guilty plea is a significant blow to the cryptocurrency community, which had long defended him as a visionary entrepreneur who had revolutionized the industry. However, his actions have left a trail of destruction, with many investors still reeling from the consequences of his actions.
The Impact on the Cryptocurrency Market
The collapse of TerraUSD and Luna had a profound impact on the cryptocurrency market, with many investors losing their confidence in the industry. The incident highlighted the vulnerabilities of cryptocurrency markets and the need for greater regulation and oversight.
In the aftermath of the collapse, many cryptocurrency exchanges and investors began to question the security and stability of the industry. The incident also led to a significant decline in the value of other cryptocurrencies, with many losing tens of billions of dollars in value.
Conclusion
Do Kwon’s guilty plea marks the end of an era in the cryptocurrency world. The ‘Cryptocurrency King’ is now facing the consequences of his actions, which have left a trail of destruction in their wake.
As the industry moves forward, it is essential that we learn from the mistakes of the past and work towards creating a more stable and secure future for cryptocurrency. The collapse of TerraUSD and Luna is a stark reminder of the dangers of unchecked ambition and the need for greater regulation and oversight.
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