Crypto King’ Do Kwon, behind TerraUSD & Luna, pleads guilty to ₹3.5-lakh-crore fraud
In a stunning turn of events, South Korean entrepreneur Do Kwon, dubbed 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 lost a staggering $40 billion (nearly ₹3.5 lakh crore) in 2022, co-founded Terraform Labs and faced a whopping 25 years in prison. However, with his guilty plea, his sentence may be reduced to a mere 12 years.
The news of Kwon’s guilty plea comes as a shock to the cryptocurrency world, where he was once hailed as a pioneer and innovator. TerraUSD and Luna, which were launched in 2019, gained immense popularity due to their unique decentralized finance (DeFi) model. However, in May 2022, the value of both coins plummeted, wiping out billions of dollars in investor wealth.
The collapse of TerraUSD and Luna sent shockwaves across the global financial landscape, sparking widespread criticism and regulatory scrutiny. In the aftermath, Kwon and his team were accused of perpetrating a massive fraud, with allegations of insider trading, market manipulation, and asset misappropriation.
Kwon’s legal troubles began in October 2022, when he was charged with 10 counts of wire fraud, nine counts of securities fraud, and one count of conspiracy to commit wire and securities fraud. The US Department of Justice accused him of orchestrating a “multibillion-dollar fraud scheme” that defrauded thousands of investors.
In his guilty plea, Kwon admitted to conspiring with others to commit wire fraud and to make false statements to investors. He also acknowledged that he and his co-conspirators used false and misleading statements to promote TerraUSD and Luna, and that he used the funds he raised to invest in other cryptocurrencies and to pay off debts.
The guilty plea is a significant development in the ongoing legal saga surrounding Kwon and Terraform Labs. While Kwon’s admission of guilt may seem like a victory for justice, it also raises questions about the extent of his involvement in the fraud and the potential consequences for his co-conspirators.
The case against Kwon and Terraform Labs is complex and multifaceted, involving allegations of fraud, mismanagement, and regulatory breaches. The US Department of Justice has accused Kwon of using his company to perpetrate a “massive Ponzi scheme”, in which he used funds raised from investors to invest in other cryptocurrencies and to pay off debts.
Kwon’s guilty plea may also have significant implications for the cryptocurrency industry as a whole. The collapse of TerraUSD and Luna has already sparked a wave of regulatory scrutiny and increased scrutiny of DeFi platforms. If Kwon’s actions are found to have been fraudulent, it could set a precedent for future cases and potentially lead to stricter regulations and oversight of the industry.
In the coming weeks and months, the legal battle will continue to unfold. Kwon’s sentencing is expected to take place in the coming months, and it is likely that his co-conspirators will face charges and potentially plead guilty as well.
In conclusion, Do Kwon’s guilty plea is a significant development in the ongoing legal saga surrounding TerraUSD and Luna. While it may seem like a victory for justice, it also raises questions about the extent of Kwon’s involvement in the fraud and the potential consequences for his co-conspirators. As the legal battle continues to unfold, one thing is clear: the collapse of TerraUSD and Luna has sent shockwaves across the global financial landscape, and the consequences will be felt for years to come.
