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, notorious for his role in the collapse of cryptocurrencies TerraUSD and Luna, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was dubbed the “Cryptocurrency King” by some, co-founded Terraform Labs and faced a maximum sentence of 25 years in prison. However, his guilty plea may lead to a reduced sentence of 12 years.
The news of Kwon’s guilty plea comes after his Terraform Labs and its associates were accused of perpetrating a massive fraud, resulting in the loss of approximately $40 billion (nearly ₹3.5 lakh crore) in 2022. The collapse of TerraUSD and Luna was one of the most significant events in the cryptocurrency market last year, leaving millions of investors worldwide reeling.
According to reports, Kwon’s Terraform Labs had created a complex Ponzi scheme, where investors were promised unusually high returns on their investments in TerraUSD and Luna. The scheme was designed to create a sense of security among investors, with TerraUSD being pegged to the US dollar and Luna being marketed as a stablecoin. However, the scheme was unsustainable, and when the bubble burst, investors suffered massive losses.
Kwon’s guilty plea is a significant development in the ongoing legal proceedings against him. In November 2022, Kwon and his associates were charged with conspiracy to commit wire fraud, wire fraud, and multiple counts of securities fraud. The charges were brought by the US Department of Justice after an investigation into the collapse of TerraUSD and Luna.
The plea deal, which is subject to approval by the court, could see Kwon serving a reduced sentence of 12 years in prison. However, the exact sentence will be determined by the judge at the time of sentencing.
The collapse of TerraUSD and Luna had far-reaching consequences, not only for the cryptocurrency market but also for the global financial system. The event led to a significant decrease in investor confidence in the cryptocurrency market, resulting in a decline in the value of many digital currencies.
The TerraUSD and Luna collapse also raised concerns about the lack of regulation in the cryptocurrency market. Many experts argue that the absence of robust regulations and oversight mechanisms allowed Kwon and his associates to perpetrate the fraud without being detected.
The case against Kwon and his associates is a warning to investors to be cautious when investing in cryptocurrencies. While cryptocurrencies can be a lucrative investment opportunity, they are also highly risky and vulnerable to manipulation.
In conclusion, Do Kwon’s guilty plea is a significant development in the ongoing legal proceedings against him. The plea deal, which could see Kwon serving a reduced sentence of 12 years in prison, is a reminder of the consequences of perpetrating fraud in the financial markets. The case serves as a warning to investors to be cautious when investing in cryptocurrencies and to always do their due diligence before making any investment decisions.
