Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
The world of cryptocurrency has been hit with yet another scandalous revelation, as Do Kwon, the South Korean entrepreneur behind the failed cryptocurrencies TerraUSD (UST) and Luna, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was once dubbed the “Cryptocurrency King” due to his meteoric rise to fame in the crypto space, now faces the possibility of serving 12 years in prison, a significant reduction from the original 25-year sentence.
For those who may be unfamiliar with the TerraUSD and Luna debacle, a brief recap is in order. In May 2022, the value of TerraUSD (UST), a stablecoin pegged to the US dollar, began to plummet, sparking a chain reaction that led to the collapse of Luna (LUNA), another cryptocurrency created by Kwon’s company, Terraform Labs. The collapse of UST and LUNA resulted in the loss of approximately $40 billion (nearly ₹3.5 lakh crore), making it one of the largest cryptocurrency failures in history.
The aftermath of the collapse was marked by widespread criticism of Kwon and his company, with many accusing them of fraudulent activities. In the months that followed, Kwon went into hiding, and his whereabouts remained unknown for several months. However, in March 2023, he was arrested in Montenegro, a small Balkan country, and extradited to the United States to face charges.
The charges against Kwon were severe, with the US Department of Justice accusing him of orchestrating a massive fraud scheme that defrauded thousands of investors worldwide. The indictment alleged that Kwon and his co-conspirators used false and misleading statements to promote UST and LUNA, causing investors to lose millions of dollars.
Kwon’s guilty plea, which was accepted by a federal court in New York, marks a significant turning point in the case. By pleading guilty, Kwon has admitted to the charges against him, which could potentially reduce his sentence to 12 years in prison, as opposed to the original 25-year sentence.
The guilty plea has sent shockwaves through the cryptocurrency community, with many experts and investors expressing outrage and disappointment. “This is a devastating blow to the cryptocurrency community,” said cryptocurrency analyst, Alex Krüger. “Do Kwon’s actions were reckless and fraudulent, and he deserves to face the consequences.”
The collapse of TerraUSD and Luna has far-reaching implications for the cryptocurrency space. The incident has raised questions about the regulatory oversight of the industry, as well as the accountability of cryptocurrency entrepreneurs and companies.
In the aftermath of the collapse, several regulatory bodies have launched investigations into the activities of Terraform Labs and Kwon. The US Securities and Exchange Commission (SEC) has accused Kwon and his company of violating securities laws, while the Financial Crimes Enforcement Network (FinCEN) has launched an investigation into the company’s anti-money laundering practices.
The TerraUSD and Luna debacle has also led to calls for greater regulation of the cryptocurrency industry. Many experts argue that the lack of regulation and oversight contributed to the collapse, and that stricter regulations are needed to protect investors and prevent similar incidents from occurring in the future.
In conclusion, Do Kwon’s guilty plea marks a significant turning point in the TerraUSD and Luna saga. While the guilty plea may bring some closure to the incident, it is clear that the consequences of Kwon’s actions will be felt for years to come. As the cryptocurrency space continues to evolve, it is essential that regulatory bodies and entrepreneurs take steps to ensure the integrity and transparency of the industry.
