The Terra ecosystem collapse in 2022 didn't make as many headlines as FTX, but the total number of victims could exceed 1 million, according to new court documents.
The documents filed this week allege that the number of victims of disgraced crypto mogul, Terraform Labs founder Do Kwon, is “difficult to precisely quantify.”
Kwon last week pleaded not guilty in a New York court to U.S. criminal charges including fraud over the collapse of the Terra crypto ecosystem. His crypto project went up in smoke in 2022, leaving a $40 billion black hole and many investors out of pocket.
Do Kwon Pleads Not Guilty to US Charges Over Terra LUNA, UST Crash
Alleged crypto crook Do Kwon pleaded pleaded not guilty in a New York court Thursday to U.S. criminal charges over the 2022 collapse of the Terra crypto ecosystem, following his extradition earlier this week from Montenegro. Feds hit the 33-year-old disgraced tech entrepreneur with nine criminal counts, including securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering. He agreed Thursday to be held without bail before U.S. Magistrate Judge Robert Lehrburger, In...
“Given the number of potential victims in this case, the government respectfully submits that it is impracticable to give individualized notice to each potential victim,” a Monday court document read.
It added that the government believes that the number of victims “exceeds hundreds of thousands of individuals and entities, and potentially totals more than 1 million.”
Kwon founded the crypto ecosystem Terra, which had the flagship LUNA token and TerraUSD (UST) algorithmic stablecoin as its main products. Investors used it as a gateway into the world of decentralized finance, or DeFi, and LUNA quickly became one of the most valuable crypto coins on the market.
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Cryptocurrency prices are plunging across the board early Tuesday, led by major assets like Bitcoin, Dogecoin, and Solana, as new economic data appears to be sending a chill across the crypto and stock markets alike. Bitcoin plunged from a price of nearly $101,000 to a current price of $97,856, showing a more than 4% dip on the day. Ethereum and Dogecoin, meanwhile, have both fallen by about 7% on the day, with Solana close behind with a 6% drop. Hotter-than-expected data on job openings in the...
But the UST stablecoin couldn’t keep its stable peg to the U.S. dollar, and the entire ecosystem collapsed, wiping its market cap out very quickly.
Authorities now allege that Kwon conned investors into a sham project to enrich himself. Feds in both the U.S. and Korea have hit him with criminal charges. In the U.S., Kwon is facing nine criminal charges, including securities, wire, and commodities fraud, plus conspiracy to commit money laundering.
“Behind the scenes, core Terraform products did not work as Kwon advertised, and were manipulated to create the illusion of a functioning and decentralized financial system in order to lure investors,” the Monday document read.
Ethereum and Solana NFT Scammers Charged in $22 Million Rug Pull Scheme
Two California men have been charged with orchestrating a series of NFT rug pulls that totaled more than $22 million bilked from buyers, the U.S. Department of Justice said in an indictment unsealed on Friday. The DOJ said the case is the largest NFT scheme it's ever prosecuted. Gabriel Hay of Beverly Hills, and Gavin Mayo of Thousand Oaks are each charged with one count of conspiracy to commit wire fraud, two counts of wire fraud, and one count of stalking. The men were arrested Thursday in Los...
Terra collapsed ahead of FTX’s own bankruptcy in 2022. FTX, once a huge crypto brand that allowed users to buy and sell digital coins and tokens, quickly collapsed due to criminal mismanagement.
Following a much-publicized criminal trial, co-founder Sam Bankman-Fried is now serving a 25-year sentence for his part in the collapse of his crypto company. His attorneys have appealed the judgment, claiming an unfair trial.
Edited by Andrew Hayward
