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 cryptocurrencies TerraUSD and Luna, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was once hailed as the “Cryptocurrency King” for his innovative ideas and rapid success, has now admitted to his role in the massive fraud that led to the loss of nearly ₹3.5 lakh crore ($40 billion) in 2022.
Kwon, who co-founded Terraform Labs, was facing up to 25 years in prison if convicted. However, with his guilty plea, he may be able to reduce his sentence to as little as 12 years. The news has sent shockwaves through the cryptocurrency world, where Kwon’s reputation had been built on his success with TerraUSD and Luna.
TerraUSD and Luna were among the most popular cryptocurrencies in the world, with TerraUSD being pegged to the US dollar and Luna being a sister cryptocurrency. However, in May 2022, the two cryptocurrencies suddenly crashed, wiping out the life savings of thousands of investors. The crash was so severe that it led to widespread panic and calls for regulation in the cryptocurrency market.
The US Securities and Exchange Commission (SEC) had accused Kwon and his company of perpetrating a massive fraud scheme, which involved misusing investor funds and manipulating the market price of the two cryptocurrencies. The SEC had also accused Kwon of making false and misleading statements to investors and the public about the stability and security of TerraUSD and Luna.
The investigation into Kwon’s activities was extensive and involved multiple agencies, including the SEC, the US Department of Justice, and the Federal Bureau of Investigation (FBI). The authorities had accused Kwon of using the funds raised from investors to finance his lavish lifestyle, including buying luxury cars and properties.
Kwon’s guilty plea comes as a significant blow to the cryptocurrency industry, which had been reeling from the collapse of TerraUSD and Luna. The collapse had sparked widespread criticism of the industry’s lack of regulation and oversight, and had led to calls for greater regulation and accountability.
The news of Kwon’s guilty plea has also sent shockwaves through the cryptocurrency community, where many investors had lost significant amounts of money as a result of the collapse of TerraUSD and Luna. Many investors had been left feeling betrayed and angry, and had accused Kwon and his company of perpetrating a massive fraud.
In a statement, the US Attorney’s Office for the Southern District of New York said that Kwon’s guilty plea “brings to an end the fraudulent scheme that he and his co-conspirators perpetuated against investors in TerraUSD and Luna.” The statement added that Kwon’s actions had caused “significant financial harm” to thousands of investors and had undermined confidence in the cryptocurrency market.
Kwon’s legal team has not commented on the guilty plea, but it is expected that he will face sentencing in the coming months. The exact length of his sentence will depend on the judge’s discretion, but he could potentially face up to 12 years in prison.
The guilty plea of Do Kwon is a significant milestone in the investigation into the collapse of TerraUSD and Luna. It is a reminder that the cryptocurrency industry is not immune to fraud and that regulators and law enforcement agencies will take action against those who perpetrate such schemes.
As the cryptocurrency industry continues to evolve and grow, it is essential that investors and the public remain vigilant and demand greater accountability and transparency from companies and individuals involved in the industry.
