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, known by some as the ‘Cryptocurrency King’, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, the mastermind behind the cryptocurrencies TerraUSD and Luna, which collapsed in 2022, causing a loss of $40 billion (approximately ₹3.5 lakh crore), has faced the music and admitted to the charges. This admission may result in a reduced sentence of 12 years, instead of the maximum 25 years Kwon could have faced.
Do Kwon, the co-founder of Terraform Labs, was one of the most influential figures in the cryptocurrency world. His TerraUSD and Luna coins were touted as revolutionary, promising stability and high returns. However, in May 2022, the coins began to plummet, wiping out billions of dollars in value. The collapse sent shockwaves through the global financial markets, leaving investors reeling.
Kwon’s guilty plea was announced on Monday, February 27, by the US Department of Justice. As part of the plea agreement, Kwon admitted to conspiring to commit wire fraud and wire fraud itself. He also agreed to forfeit $40 million in assets.
The TerraUSD and Luna coins were marketed as a stablecoin and a decentralized finance (DeFi) platform, respectively. However, an investigation by the US Department of Justice revealed that Kwon and his associates had engaged in a scheme to manipulate the prices of the coins, artificially inflating their value. The scheme allegedly involved Kwon and his team making false statements about the coins’ value and liquidity, as well as using fake trading volume to support the illusion of stability.
The consequences of Kwon’s scheme were devastating. The collapse of TerraUSD and Luna led to a global cryptocurrency market downturn, causing widespread losses and financial instability. Many investors, including institutional investors and retail traders, were left with significant losses.
Kwon’s guilty plea is a significant development in the ongoing investigation into the collapse of TerraUSD and Luna. The US Department of Justice has been investigating the collapse since 2022, and several other individuals and companies have been implicated in the scheme.
Kwon’s legal team has yet to comment on the plea agreement, but it is expected that he will face a significant sentence. Under the terms of the plea agreement, Kwon faces a maximum sentence of 12 years in prison, although the actual sentence may be shorter depending on the judge’s discretion.
The implications of Kwon’s guilty plea are far-reaching. The collapse of TerraUSD and Luna has raised concerns about the regulation of the cryptocurrency market and the need for greater transparency and accountability. The case has also highlighted the risks associated with investing in cryptocurrencies and the importance of conducting thorough due diligence before investing.
As the cryptocurrency market continues to evolve, the case of Do Kwon and the collapse of TerraUSD and Luna serves as a cautionary tale about the importance of transparency, accountability, and regulatory oversight.
