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, who was behind the collapse of cryptocurrencies TerraUSD (UST) and Luna, which led to a staggering loss of $40 billion (approximately ₹3.5 lakh crore) in 2022, has admitted to the charges.
Kwon, who co-founded Terraform Labs, faced a maximum sentence of 25 years in prison for his crimes. However, with his guilty plea, he may be eligible for a reduced sentence of 12 years.
The news of Kwon’s guilty plea comes as a surprise to many, as the entrepreneur had initially denied any wrongdoing. Terraform Labs was a prominent player in the cryptocurrency space, with UST and Luna being two of its most popular digital assets. However, in May 2022, the price of UST and Luna collapsed, leading to a massive financial loss for investors.
The collapse of TerraUSD and Luna was one of the most significant events in the history of cryptocurrency, with many investors losing significant amounts of money. The incident also led to a global crackdown on cryptocurrency exchanges and a re-evaluation of the regulatory framework surrounding digital assets.
Kwon’s guilty plea is 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 wire fraud, alleging that he had defrauded investors by misrepresenting the stability and value of UST and Luna.
According to the Department of Justice, Kwon and his co-conspirators had falsely represented that UST was a stablecoin, backed by a reserve of assets. However, in reality, UST was not backed by any reserve and its value was pegged to Luna. When the price of Luna collapsed, the value of UST also plummeted, leading to a massive loss for investors.
Kwon’s guilty plea may have significant implications for the cryptocurrency industry as a whole. The incident has highlighted the need for greater regulation and oversight of digital assets, with many calling for stricter rules to prevent similar incidents in the future.
In a statement, the US Department of Justice said, “Do Kwon’s guilty plea is a significant step towards holding him accountable for his role in the collapse of TerraUSD and Luna. We will continue to work tirelessly to ensure that those who commit fraud are brought to justice and that investors are protected.”
Kwon’s legal team has not commented on the matter, but it is expected that he will cooperate with authorities and provide information about his activities and those of his co-conspirators.
The collapse of TerraUSD and Luna has had significant consequences for the cryptocurrency industry, with many investors left to pick up the pieces. The incident has also led to a re-evaluation of the risks associated with investing in digital assets, with many experts warning of the dangers of unregulated markets.
As the investigation into the collapse of TerraUSD and Luna continues, it is likely that we will learn more about Kwon’s activities and those of his co-conspirators. One thing is certain, however – the ‘Cryptocurrency King’ is no longer in a position to dictate the terms of the digital assets market.
