Launched a cryptocurrency that incurred losses of $40 billion and now faces over 100 years in prison
In 2022, one of the first collapses of the crypto ecosystem occurred when "Luna" plummeted, dragging the entire Terra project down with it. The CEO was Do Kwon, a South Korean from Seoul. This crisis caused savers and those betting on this cryptocurrency to lose a total of 40 billion dollars.
Since his return to Korea, he has worked on new projects that would lead to the Terra project and the Luna cryptocurrency. In January 2018, Do Kwon founded Terraform Labs alongside South Korean entrepreneur Daniel Shin. Following the footsteps of Basis Cash, both entrepreneurs proposed the development of a payment protocol capable of integrating multiple algorithmic stablecoins, as well as other tokens, while offering high processing speed and interaction.
By 2019, they had already received investments totaling 150 million dollars from companies such as Galaxy Digital, Pantera Capital, Binance, Huobi, and OKX. In 2020, the dollar-pegged stablecoin made its appearance in the market, Terra UST.
The fall of Terra began in 2022, a period characterized by a general bearish trend across the entire cryptocurrency market. The Terra project kicked off the bad streak in the ecosystem when, in April of that year, its stablecoin UST lost parity with the dollar.
The mismatch was controlled within a few days, but in May it lost parity again and never recovered. Over the course of a week, the LUNA token incurred losses of 40 billion dollars, trading at cents on the dollar.