- Do Kwon has been inactive on social media since December 2022.
- South Korean authorities are making a continuous effort to locate him and bring him back to South Korea.
Do Kwon’s Background
Kwon Do-Hyung is the founder and CEO of Singapore-based blockchain protocol Terraform Labs, the parent company of the crashed stablecoins UST and Luna.
He is of South Korean Nationality and a computer science graduate from Stanford University with advanced knowledge of multiple programming languages like C++, Python, and Java.
After the collapse of Luna, which was once among the top cryptocurrencies in the world, and its algorithmic stablecoin UST, Kwon became an outcast and is wanted by the South Korean authorities.
The blockchain ecosystem of Terra was operated by Terraform Labs and powered by its native token, Luna. The de-pegging of its stablecoin pair UST/Luna caused the Terra network to implode; due to this, the value of both tokens took a plunge.
This shook the entire crypto industry and led to the bankruptcies of multiple high-profile lending firms.
After the disastrous runs of UST and Luna, Do Kwon made several attempts to rebuild the ecosystem, but they were all in vain. Since then, he has been in the crosshairs of South Korean authorities. Although it has been an uphill struggle for the South Korean Authorities to nail down the exact location of the fugitive CEO.
Do Kwon’s 2022
In 2022, the company launched a not-for-profit organization called Luna Foundation Guard. The company invested around 4 Billion US Dollars to stabilize the volatility of Luna by backing it up with the UST.
In May 2022, the ecosystem started to unravel when the mechanism that maintained UST’s $1 pegged to Luna started to disintegrate.
The massive selling of UST drove its price down below the threshold of $1, which created an arbitrage opportunity for Luna. The supply pools of UST and Luna adjust themselves as per the price of the token pair and maintain their value at $1.
In May 2022, the price of UST fell below $1, so the investors swapped it with Luna at a net profit, but due to the cascading effect, the price of both tokens took a nosedive, wiping out billions of dollars worth of coins.
The failures of UST and Luna caused great damage to the cryptocurrency industry. Companies like Three Arrow Capital, which had a significant interest in Terra, filed for bankruptcy.
Kwon has made efforts to compensate for the losses of previous investors by launching a new protocol named Terra 2.0.
Kwon’s 2023
As per the reports by South Korean authorities, Do Kwon has been residing in Serbia with an arrest warrant issued in his name by his home country. Interpol has issued a red notice citing his detention and extradition back to South Korea.
In June 2023, the SEC asked Swiss banks to seize all of Do Kwon’s assets after his law firm filed a motion to dismiss the lawsuit against the SEC.
Moreover, a Montenegro court sentenced Do Kwon and Han Chang-Joon to four months in jail for using a fake Costa Rican passport to board a flight to Dubai in March.
Amidst all this, Terra 2.0, the fork of Terra, continues to operate under the new name Terra Classic. With this new protocol, the company plans to roll out new services while focusing on cross-chain integration.
Conclusion
Do Kwon is the co-founder and former CEO of TerraForm Labs, known for its native tokens Luna and UST stablecoin. Following the collapse of Luna and UST, he became a fugitive wanted by South Korean authorities. Despite his efforts to rebuild the ecosystem, legal issues and bankruptcies ensued. Terra 2.0, now Terra Classic, operates amidst the aftermath, focusing on cross-chain integrations.
