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, dubbed by some as ‘Cryptocurrency King’, has pleaded guilty to conspiracy to defraud and wire fraud. Kwon, who was 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 25 years in prison. However, with his admission, his sentence may be reduced to 12 years.
For those who may not be familiar, Do Kwon is a South Korean entrepreneur who gained international attention for his ambitious project, Terraform Labs, which aimed to create a decentralized finance (DeFi) platform. He was hailed as a visionary and a pioneer in the cryptocurrency space, earning him the nickname ‘Crypto King’. However, his empire came crashing down in May 2022 when TerraUSD, a stablecoin, lost its peg to the US dollar, causing a massive selloff and wiping out nearly $40 billion in value from the market.
The collapse of TerraUSD and Luna sent shockwaves across the crypto community, leaving millions of investors with significant losses. An investigation by the US Department of Justice (DOJ) revealed that Kwon and his co-founder, Daniel Shin, had engaged in a series of fraudulent activities, including concealing the true nature of their project and misrepresenting the stability of TerraUSD.
The DOJ alleged that Kwon and Shin had used the proceeds from the sale of TerraUSD to fund their lavish lifestyles, including luxury cars, properties, and even a private jet. The investigation also uncovered allegations of insider trading, where Kwon and his associates had used their privileged access to manipulate the market and profit from the collapse of TerraUSD and Luna.
In a statement, the DOJ said, “Do Kwon and Daniel Shin conspired to commit wire fraud and laundered millions of dollars in ill-gotten gains.” The department alleged that Kwon had used the company’s funds to make lavish purchases, including a $2.5 million luxury condominium in Los Angeles and a $1.2 million villa in the South of France.
Kwon’s guilty plea comes as a significant blow to the cryptocurrency community, which had previously held him in high esteem. Many had seen him as a visionary and a pioneer in the space, and his downfall has left a sour taste in the mouths of many investors who lost significant sums of money in the collapse of TerraUSD and Luna.
The consequences of Kwon’s actions are far-reaching, with many investors still reeling from the losses they suffered in the collapse of TerraUSD and Luna. The incident has also raised concerns about the lack of regulation in the cryptocurrency space, with many calling for stricter oversight to prevent such frauds from happening in the future.
In the aftermath of the collapse, many have spoken out about the need for greater transparency and accountability in the cryptocurrency space. The incident has also led to a renewed focus on the importance of regulatory oversight, with many calling for governments to take a more active role in policing the industry.
In conclusion, Do Kwon’s guilty plea is a significant development in the saga of TerraUSD and Luna. While it is unlikely to bring back the lost fortunes of those who invested in the cryptocurrencies, it does bring a measure of justice to those who were affected by Kwon’s fraudulent activities.
