Terra’s Do Kwon: ‘There Is a Distinction Between Failing and Operating a Fraud’

Do Kwon, the co-founder of Terraform Labs, stated that he was “devastated” by final month’s collapse of the TerraUSD (UST) stablecoin and its sister token LUNA, expressing his hope that 1000’s of buyers who’ve been affected by the Terra ecosystem’s implosion are “taking good care of themselves.”

Kwon additionally claimed that he had personally misplaced practically all his internet value in Terra’s crash, whereas additionally hitting again at claims that the undertaking was a “fraud.”

“I made assured bets and made assured statements on behalf of UST as a result of I believed in its resilience and its worth proposition,” Kwon stated in a current interview with The Wall Street Journal. ”I’ve since misplaced these bets, however my actions 100% match my phrases. There’s a distinction between failing and working a fraud.”

Kwon’s crypto holdings have been estimated to have made him a billionaire on paper when LUNA was buying and selling round $100 earlier this 12 months. He stated that the lack of the majority of his internet work “would not hassle” him as he leads “a reasonably frugal life.”

The Terra ecosystem imploded spectacularly final month after UST—the undertaking’s algorithmic stablecoin, which was supposed to take care of a 1:1 peg to the U.S. greenback—misplaced its parity to the dollar, bottoming out at simply 13 cents.

On the similar time, LUNA (since renamed LUNC), as soon as a high ten cryptocurrency which was used to stabilize the worth of UST, crashed to a fraction of a cent, wiping out tens of billions in buyers’ wealth.

Terra and regulators

The collapse of the Terra ecosystem has attracted regulatory scrutiny. In the USA, the Securities and Trade Fee (SEC) is reportedly trying right into a potential violation of federal investor safety guidelines in relation to UST advertising and marketing practices carried out by Terraform Labs, whereas South Korean authorities have launched a separate investigation to find out whether or not intentional value manipulation and different points might have been behind the UST collapse.

A category-action lawsuit was additionally introduced towards Kwon and Terraform Labs final week in U.S. District Courtroom in Northern California.

Within the wake of the crash, on the finish of Could the Terra neighborhood authorised the launch of Terra 2.0, a undertaking that included creating a brand new LUNA token.

“I’ve nice confidence in our capacity to construct again even stronger than we as soon as have been,” Kwon advised The Wall Road Journal, including that “many builders” are presently “within the means of relaunching their apps on the brand new chain.”

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