Do Kwon Pleads Guilty to US Fraud Charges In $40 Billion Crypto Collapse

Terraform Labs founder Do Kwon pleaded guilty in U.S. federal court to conspiracy to defraud and wire fraud over the $40 billion collapse of TerraUSD and Luna in 2022. Reuters reports: Kwon, 33, who co-founded Singapore-based Terraform Labs and developed the TerraUSD and Luna currencies, entered the plea at a court hearing in New York before U.S. District Judge Paul Engelmayer. He had pleaded not guilty in January to a nine-count indictment charging him with securities fraud, wire fraud, commodities fraud and money laundering conspiracy.

Accused of misleading investors in 2021 about TerraUSD - a so-called stablecoin designed to maintain a value of $1 - Kwon pleaded guilty to the two counts under an agreement with the Manhattan U.S. Attorney's office, which brought the charges. He faces up to 25 years in prison when Engelmayer sentences him on December 11, though prosecutor Kimberly Ravener said the government had agreed to advocate for a prison term of no more than 12 years provided he accepts responsibility for his crimes. "I made false and misleading statements about why it regained its peg by failing to disclose a trading firm's role in restoring that peg," Kwon said in court. "What I did was wrong."

Re:

[karmawarrior]

Someone about to get a pardon, I believe.

Simple fact: Crypto is ALWAYS a scam.

[Moryath]

It has precisely 2 purposes: to serve as a pyramid / "greater fool theory" scam, and to hide transactions for crimes like extortion/ransomware, illegal drugs and Kiddie Pr0n.

Re:Simple fact: Crypto is ALWAYS a scam.

[ndsurvivor]

My theory is that with BTC being "mainstreamed", is that after about a 20% collapse in the stock market, that everybody will start to sell BT at once. All of a sudden... it will plummet near zero and everybody will wonder why nobody wants to buy their tulips anymore.

Re:

[real_nickname]

BTC reaching 0 is totally unlikely at this point in time. It can go down -50%, -60% sure but reaching near 0, nope. Enough people will see it as a premium lottery ticket to stabilize at a high price far from 0, whatever happens.

Re: Simple fact: Crypto is ALWAYS a scam.

[aurasdoom]

"conversion free" LOL
Good one
I hope you were just joking

Current Stage: The Great Grift

[Anonymous Coward]

The grand master plan of crypto

The plan for all cryptocurrencies isn't what they want to make you think it is. It's more sinister than the egalitarian image the crypto boys portray for it.

After the 2008 financial meltdown, cryptocurrencies were born out of it, declared to be the means by which people could be freed from banks/governments, and promised to avoid any such future meltdowns from happening ever again.

But the crypto boys watched closely the result of that meltdown, and formulated their plan: create a new form of currency, and for it a new financial system detached from traditional ones (those burdened by "governments and regulations") - they called it "DeFi" for "Decentralized Finance", but its dirty little secret is that it's really "Deregulated Finance".

Their plan is to make this new money be adopted by the masses, so they start it off with a low price, then gradually increase it, by virtue of them just pulling numbers out of thin air for its value, until it catches the attention of the masses - then it gets more and more "valuable" from the collective faith of its given value ("network effect"), until traditional institutions and the typical "1%" billionaires start to notice and, greedy as they are, want in on the action too.

So now those that got in at the ground floor have gained all this "value" out of thin air, and once they're ready, they'll pull out all pretty much at once ("rug pull") - that it'll create a sell-off panic, and a new meltdown is born! And because of their "De[regulated]Fi" system, the bros have already shifted all the risks away from themselves onto others, so they'll make out like bandits, leaving everyone else to "hodl" the bag.

But the bros were really observant about that last meltdown - and noticed all the "bailouts" the big banks got - so as they were shifting the risks to others, they increased their investments into what would get the next bailouts - so in the end they'll make out like bandits twice: the first time from suckering everyone else into their pump-and-dump scam, and again once they benefit from the bailouts that'll get handed out.

And there you have it folks, the real master plan of crypto.

--
"Cryptocurrencies will bring about a worse financial meltdown than the one they were born from." -Prof. Feynman

Re: Current Stage: The Great Grift

[RealMelancon]

Then when it will crash, the analystes will want to look back as to what happened. Latest decision from Trump to open the gates for 401k investments in crypto, will probably be one of the milestones.

Reality check

[Slashythenkilly]

The Donald just opened the flood gates for 401k investments in crypto.

Reporters shouldn't normalize verbs.

[sabbede]

I'll admit, it's a bug up my ass. Court/Crime reporters are trying to normalize the irregular verb "to plea" for their own convenience despite contradicting that which they are reporting. In courts, they use it correctly. The present and past tense of the word are spelled the same, too bad, live with it. You won't hear the fake word "pleaded" in court, only from reporters talking about court cases. That bugs the hell out of me.

I'm confused

[CEC-P]

Why did anyone invest in a new way of storing money that, by definition, never goes up or accrues interest in any way. It's like if they had an inflation-proof(ish) product like real estate or gold and then did the opposite. And people gave him 40 billion for that?

Re:

[real_nickname]

Stable coin allows to not pay tax on your crypto benefits. In the case of Terra, the whole thing was based on a lending protocol. You lock some terrausd and get interests in form of some Luna coin in exchange. But the link between TerraUSD and Luna coin lead to a collapse when Luna lost values overnight.