The saga Do Kwonthe founder of cryptocurrency Terra Lunatook on a new chapter, with authorities in Montenegro considering extraditing the businessman to the United States, a development that deviates from the initial expectation of a return to South Korea, his home country.
Kwon was arrested in Montenegro in March following accusations of using forged documents and faces an uncertain future. The financial fiasco linked to the collapse of the stablecoin TerraUSD (UST) and token Luna (LUNA), which resulted in a catastrophic loss of more than $40 billion in the cryptocurrency market, is at the center of the allegations.
In the United States, Kwon could face a range of serious charges, including commodities fraud, securities fraud and market manipulation. The announcement comes at a critical time, shortly after Kwon formally appealed his extradition from Montenegro, as reported by Wall Street Journal sources.
In South Korea, by contrast, Kwon is accused of violating capital markets laws and using “trader bots” to manipulate transaction volumes, in addition to bribery charges.
South Korean prosecutors are pushing for him to be tried in the country, stressing the need for accountability for the losses suffered by investors.
The decision on Kwon’s extradition is expected to be announced soon, as reported in local news. The case, which mirrors the Sam Bankman-Fried trial, promises to further shake up the already turbulent world of cryptocurrencies, especially in the United States, where prosecutors are preparing for a possible trial.
Think about the matter
The case of Terra (LUNA) and TerraUSD (UST) is one of the most dramatic and impactful events in the history of cryptocurrencies. Originating from Terraform Labs, led by Do Kwon, the project aimed to create a stable and scalable cryptocurrency ecosystem.
UST was a stablecoin designed to keep its value pegged to the US dollar, while LUNA was a token used to stabilize the price of UST.
Initially, the system worked as planned, and both LUNA and UST gained popularity and value in the cryptocurrency market. However, in May 2022, the ecosystem collapsed.
The UST lost its peg to the dollar, leading to a crisis of confidence and a massive sell-off in both the UST and LUNA. In a short time, the value of LUNA plummeted almost to zero, and UST also lost its value significantly.
The collapse of the project resulted in massive losses for investors, with more than $40 billion evaporating from the cryptocurrency market.
The event has had a profound impact on LUNA and UST holders and caused a ripple effect throughout the cryptocurrency industry, raising questions about the viability and security of stablecoins and the cryptocurrency market as a whole.
The consequences of the collapse went beyond financial losses. Legal and regulatory questions have been raised, with Do Kwon and Terraform Labs facing investigations and allegations of fraud and market manipulation.
Source: Live Coins
Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
