Web3 Continues to Go Great

Posted on Wednesday, Feb 22, 2023 by Ned Bellavance

Featured in this episode of Chaos Lever

Do Kwon, the CEO of Terraform Labs has been charged by the US Security and Exchanges Commission with securities fraud to the tune of multiple billions of dollars. For those who don’t recall, Terraform Labs maintained a stablecoin called TerraUSD, that was supposed to track the US dollar for value, counterbalanced by their other cryptocurrency, Luna coin.

In May of 2022, following a crash in the value of Luna, the value of TerraUSD began to slide, ultimately crashing both currencies in a death spiral wiping out over $40B in market value. This was the worst crypto securities fraud of all time, right up until SBF said “Hold my appletini.” a few short months later.

The collapse of TerraUSD and Luna sent reverberations throughout the larger crypto economy causing Three Arrows Capital, Voyager Digital Ltd., and Celsius Network to all file for bankruptcy.

Do Kwon is not yet in custody, with warrants for his arrest in both the US and South Korea. As much as we like to point at Web3 failures and laugh, ultimately these investment houses got their money from individuals who probably couldn’t afford the loss. It’s those people our hearts go out to.

With any luck, funds from Do Kwon’s secret Bitcoin caches can be seized and some recompense can be made to those affected.