Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
In a shocking turn of events, Do Kwon, the South Korean entrepreneur behind the now-defunct cryptocurrencies TerraUSD (UST) and Luna, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was once hailed as the “Cryptocurrency King” by some, co-founded Terraform Labs and is accused of masterminding a scheme that lost $40 billion (nearly ₹3.5 lakh crore) in 2022.
The collapse of TerraUSD and Luna sent shockwaves throughout the cryptocurrency market, wiping out the savings of thousands of investors and leaving a trail of financial devastation in its wake. The exact nature of Kwon’s crimes remains unclear, but it is believed that he and his co-conspirators used a complex web of deceit and misrepresentation to defraud investors of their hard-earned money.
Kwon’s guilty plea comes as a major blow to the cryptocurrency community, which had long revered him as a visionary and a pioneer in the field of digital currencies. However, his actions have been widely condemned, and many have called for him to be held accountable for the harm he has caused.
Under the terms of his plea agreement, Kwon faces up to 25 years in prison. However, with his guilty plea, his sentence could be reduced to as little as 12 years. This is a stark contrast to the fate that has befallen many other cryptocurrency fraudsters, who have been sentenced to far longer terms behind bars.
So, what drove Kwon to commit such a brazen and devastating act of fraud? The answer lies in his background and the circumstances that led him to create TerraUSD and Luna.
Do Kwon, real name Park Do-hyun, was born in 1988 in South Korea. He developed an early interest in computer programming and went on to study at Stanford University, where he earned a degree in computer science. After graduating, he moved to Singapore to work as a trader at a hedge fund, where he became fascinated with the potential of blockchain technology.
In 2018, Kwon co-founded Terraform Labs, a company that aimed to create a stablecoin, or a digital currency pegged to the value of another currency, such as the US dollar. The idea was to create a cryptocurrency that was less volatile than other digital currencies, such as Bitcoin, and could be used for everyday transactions.
Kwon’s vision for Terraform Labs was ambitious. He wanted to create a decentralized platform that would allow people to buy and sell cryptocurrencies without the need for intermediaries like banks or brokerages. He also wanted to use the platform to create a new kind of stablecoin, one that would be backed by a reserve of assets, such as fiat currency or other digital currencies.
TerraUSD, also known as UST, was launched in 2020 and quickly gained popularity. It was marketed as a stablecoin that was backed by a reserve of US dollars, and it was designed to be used for everyday transactions. The coin was also touted as a way for people to avoid the volatility of other digital currencies, such as Bitcoin.
However, things took a turn for the worse when the value of TerraUSD began to plummet in May 2022. The collapse of the coin, which was valued at over $40 billion at its peak, sent shockwaves throughout the cryptocurrency market and led to widespread financial devastation.
An investigation by the US Department of Justice and the Securities and Exchange Commission (SEC) subsequently uncovered a complex web of deceit and misrepresentation that had been used to defraud investors of their money. It was revealed that Kwon and his co-conspirators had used a combination of lies and misrepresentations to convince investors to buy into TerraUSD and Luna.
The investigation also uncovered a number of other irregularities, including the fact that Kwon had used company funds to buy up large amounts of TerraUSD and Luna, thereby artificially inflating their value. This practice, known as “pumping and dumping,” is illegal and is often used by fraudsters to manipulate the value of digital currencies.
In the wake of the collapse of TerraUSD and Luna, Kwon fled Singapore and went into hiding. He was eventually arrested in Montenegro in March 2023 and has been in custody ever since.
The case against Kwon is a sobering reminder of the dangers of investing in cryptocurrencies and the importance of doing one’s due diligence before putting one’s money into any investment. It is also a testament to the power of law enforcement and the importance of holding individuals accountable for their actions.
In conclusion, the case of Do Kwon is a cautionary tale about the dangers of investing in cryptocurrencies and the importance of doing one’s due diligence before putting one’s money into any investment. It is also a reminder of the power of law enforcement and the importance of holding individuals accountable for their actions.
