Do Kwon, creator of cryptocurrencies Luna and TerraUSD, is South Korea’s most hated after a Seoul court issued an arrest warrant for him this week for alleged involvement in the collapse of the global cryptocurrency market earlier this year. I became one of the men. .
sudden collapse of Cryptocurrency Billions of dollars lost in May among large and small investors, South Korean authorities issued arrest warrant Quon’s Wednesday. As co-founder and CEO of the Terraform Labs cryptocurrency ecosystem, Kwon has been accused of stock exchange breaches and fraud.
Digital sector suffers devastating financial losses and 30-year-old crypto entrepreneur Arguably the most hated man in South KoreaAdding to the scandal is the fact that Kwon has become a fugitive.
“Cult of Finance Guru”
Soul Meanwhile, authorities suspect Kwon is hiding in Singapore because he has offices in the Asian city-state and does not have an extradition treaty with South Korea.
They hesitate between several means of getting the Engineer out of hiding. financial timesand raised the idea of canceling his passport or asking Interpol to issue an emergency alert – both of which would hinder the fugitive’s ability to travel.
Due to the magnitude of the economic damage suffered, mostly to South Koreans, as a result of the collapse of Kwon’s crypto empire, Seoul is determined to do everything possible to bring Kwon to justice. Overall, around 200,000 people lost money after investing in Luna or TerraUSD. Hashed – a powerful investment fund focused on digital assets that lost $3 billion – was among them.
The power of social media has a lot to do with why so many people bet on Kwon. “He was like a cult financial guru,” South Korean investment adviser Donghwan Kim said in an interview with the Financial Times.
From Stanford to the ruthless world of crypto
Kwon had the profile of a computer genius. He graduated from Stanford University in 2015 with a degree in computer engineering at the age of 24, and has since worked at two of his Silicon Valley giants, Microsoft and Apple.
Three years later, he founded TerraUSD and Luna, starting his journey into cryptocurrency. The former is “stablecoinIn the highly volatile and ruthless world of Bitcoin and Ethereum, these cryptocurrencies are seen as safe havens. The most famous of them is Tether. They are attractive to investors.
Stablecoin prices fluctuate very little as they are usually pegged to a low volatility real currency such as the dollar. But that was not the case with his TerraUSD, which is indexed to another cryptocurrency Kwon created, his Luna. It was the latter that was supposed to ensure system stability thanks to in-house algorithms.
Ultimately, these algorithms failed and the two cryptocurrencies crashed in May. But when Kwon was developing them in his late 2010s, algorithmic sophistication didn’t matter so much. Cryptocurrencies became a fad among unsuspecting investors, and Kwon’s extraordinary personality made Luna stand out from its competitors.
“Do Kwon immediately realized that he was playing this role. [the larger-than-life personality] It will help draw more attention to himself and his projects,” said the tech news site. The Barge.
“I do not argue with the poor”
It was on Twitter that Kwon spent most of his time dealing with competitors and detractors. When The Economist asked Kwon about how his TerraUSD algorithm was used in May 2021, he replied: When asked where the hundreds of millions of dollars that Kwon claimed he had in reserves to back TerraUSD came from, one investor replied: “From your mother, of course.”.
Kwon’s displays of arrogance and disgust didn’t just stop on Twitter. A few days before Luna crashed, Kwon proclaimed on his YouTube that “his 95% of cryptocurrency projects will crash,”It’s fun to watch.”
This comment tells Luna’s followers that Kwon believes he is superior to other crypto packs and that he is for their own good, against the outside world who doesn’t understand it. He gave the impression that he was fighting with his claws. new york times.
Brad Nickel, a podcast host who specializes in cryptocurrencies, told the New York Times, “It’s a cult mentality of a leader with an extraordinary personality and at the same time a very attractive self-confidence.” Told.
Kwon’s most ardent admirers call themselves “Lunatics” and name them after Luna. One of them, Mike Novogratz, CEO of investment fund Galaxy Investment Partners, said: luna tattoo.
But it all started to unravel when Do Kwon tried to attract new followers by offering a program that paid Terra owners an astronomical 20% annual interest rate.
Luna/Terra’s popularity exploded, especially in South Korea, where the offer attracted tens of thousands of large and small investors. As TerraUSD became more and more circulated, the value of the currency plummeted and the algorithmic mechanisms designed to stabilize its price ceased to function. The whole thing implodes in a few days.
Many small investors were affected.
“I always tried my best to set aside some money, but Korea’s inflation made traditional bank investments unrewarded,” he told the Financial Times. “In the beginning, my savings skyrocketed in value, so I bet everything on Luna. And in the end, I lost everything.”
In South Korea, the impact of Luna’s collapse was so great that online searches for Mapo Bridge, a bridge in Seoul known as one of the most popular suicide spots, surged, according to the Financial Times. reported. Police have stepped up patrols in the area over the summer.
It quickly turned into a fiasco for the entire cryptocurrency industry. “Terra turmoil accelerated price decline” Natalie Janson told FRANCE 24 May. “Overall, $40 billion was wiped out of the crypto world as a result of this scandal.”
However, this did not discourage Kwon. Shortly after his company’s debacle, he returned to it and offered to create Luna 2 on the condition that investors would lend him money again. But this time, the “madmen” did not follow their guru.
This article original in French.
http://www.singaporestar.com/news/272765938/south-korea-cryptocurrency-guru-do-kwon-turns-fugitive South Korean cryptocurrency guru Dokwon is on the run