TL;DR: Do Kwon, the co-founder of Terraform Labs and creator of the crashed algorithmic stablecoin TerraUSD (UST), is facing charges from authorities in Montenegro, South Korea, and the United States after the crash of his blockchain-based payment ecosystem Terra that wiped off over $50 billion from the market, causing a domino effect for the entire cryptocurrency industry. As of 2023, his estimated net worth is believed to be between $135 - $150 million based on remaining reserves in Luna Foundation Guard's wallet, although it may be possible that he has some extra crypto assets hidden in secret wallets. In March 2023, Do Kwon was arrested in the small Balkan state of Montenegro and is currently awaiting a court hearing on forgery charges while facing extradition requests from both the South Korean government and the United States.
Who is Do Kwon?
Do Kwon, also known by his Korean birth name, Kwon Do Hyung, is a South-Korean crypto entrepreneur who co-founded Terraform Labs, the parent company of crashed algorithmic stablecoin TerraUSD (UST) and its sister coin Luna.
Kwon holds a computer science degree from Stanford College. Before venturing into the cryptocurrency industry, he reportedly worked as an engineer for tech giants Apple and Microsoft.
Less than a year ago, Do Kwon went from the decentralized finance poster child to an international fugitive after UST and Luna, the two main assets of his blockchain ecosystem Terra, experienced a sudden collapse, shedding about $50 billion in value within a week. This event caused major losses in the crypto industry, causing a domino effect on the rest of the market. Because of the Terra crash, Do Kwon is currently facing charges from authorities in Montenegro, South Korea, and the United States.
What is Do Kwon net worth after crash?
As of 2023, Do Kwon’s net worth is believed to be between $135 - $150 million, based on the remaining reserves left in the Luna Foundation Guard wallet.
According to the February 17 SEC filing, following the Terra Luna collapse in May, Do Kwon and Terraform Labs transferred over 10,000 BTC into a cold wallet, from which more than $100 million has been withdrawn via the Swiss bank.
“On a periodic basis since May 2022, Terraform and Kwon have transferred- and continue to transfer - Bitcoin from this wallet to a financial institution based in Switzerland and have converted the Bitcoin to cash,” the document reads.
However, given Kwon’s expertise in the industry and involvement in other crypto projects, it’s safe to assume that the disgraced CEO may have amassed millions of dollars in secret wallets, which makes it impossible to provide any precise numbers regarding his current net worth.
Was Do Kwon arrested?
Yes, Do Kwon was arrested on March 23, in Podgorica, Montenegro, along with Han Chang-Joon, Terra's former chief financial officer. The pair attempted to board a flight to Dubai using falsified travel documents from Belgium and Costa Rica.
Although Do Kwon repeatedly denied being on the run, his whereabouts remained unknown since Luna crash in May 2022, as he became an internationally wanted fugitive after Interpol issued a red notice on him in September 2022.
Since Kwon’s arrest, both South Korea and the United States requested his extradition, lining up a number of charges against the fugitive crypto entrepreneur, which include market manipulation, wire, securities, and commodities fraud.
In February, the US Securities and Exchange Commission filed a civil fraud lawsuit against the disgraced CEO and his company, alleging that Kwon marketed assets within the Terra ecosystem to investors seeking to earn profit and made numerous claims that they would increase in value. Meanwhile, South Korean authorities believe that the alleged fraudster has to face trial in his native country, saying that it would be the most efficient way of bringing justice to the Luna crash victims.
Where is Do Kwon now?
Currently, Do Kwon is being held in Montenegro jail, where he is awaiting the next court hearing scheduled for June 16. Although on May 12 the Basic Court of Podgorica accepted the proposal from Kwon’s lawyers to pay $430,000 to release him under supervised house arrest, the State Prosecutor’s Office appealed against the decision, calling the bail deal into question.
It’s worth noting that if Kwon is convicted of using falsified travel documents, he may first have to serve a prison sentence in Montenegro, where forgery is a serious criminal offense punishable by 5 years in jail. That would be that his stay in the country may be prolonged for a few years.
Why did Terra Luna crash?
Many were wondering why did Luna crash, witnessing the promising ecosystem collapse virtually overnight. The collapse of Terra's UST stablecoin and LUNA token can be attributed to several factors. Firstly, Terra's Anchor Protocol, which basically acted as a high-interest savings account for UST stablecoin to drive the demand for the asset, started reducing the interest rates it provided for stablecoin deposits. This caused a decline in the number of lenders, who started exiting UST en masse.
Secondly, the burn-and-mint mechanism used by Terra allowed holders to swap UST for LUNA tokens. However, the process was slow and faced technical issues, with exchanges pausing withdrawals. This mechanism also led to the dilution of the LUNA token supply, causing its price to drop further.
Additionally, UST holders also started to exit the asset by swapping in for alternative stablecoins on platforms like Curve Finance, resulting in an imbalance in the trading pool. The depeg of UST from the dollar became more pronounced as the automated mechanism at Curve’s pool created more discount to incentivize arbitrage traders to jump in.
As a result of these factors, UST lost its peg to the dollar, and the price of LUNA plummeted. Despite efforts to stabilize the situation, including the intervention of the Luna Foundation Guard and emergency actions proposed by the Terra community, the negative feedback loop persisted, leading to significant losses and the demise of the algorithmic stablecoin.
How old is Do Kwon?
At the time of writing, Do Kwon age is 31, and his birthdate is September 6, 1991. Ironically, in 2019, Kwon was named in Forbes 30 Under 30 list as a top leader in the finance and venture capital category in Asia for his development of Terra and its algorithmic stablecoin UST. As he faces financial and securities fraud charges in the US and South Korea for his role in the Terra-Luna collapse, this nomination certainly didn’t age well.
Who is Do Kwon Terra wife?
Not much is known about Do Kwon’s wife, although the wedding photos from his Twitter indicate that they got married in February 2021. The couple is known to have one daughter, whom Do Kwon named Luna, announcing her birth in April 2022 by tweeting, "My dearest creation named after my greatest invention."
In May 2022, Do Kwon wife requested emergency police protection after an individual investor who lost around $2 million to the Luna crash trespassed into their mansion to demand an apology. She is also known to have posted $430,000 in bail for Kwon to be released from the Montenegro jail under house arrest.
What is Do Kwon Twitter?
Tweeting under an account he called @stablekwon, Do Kwon cultivated a brash persona on the platform, frequently dismissing and insulting his critics. However, as the Luna collapse unfolded, he became much less audacious and even apologized for his older tweets, admitting that he got “carried away” with crypto Twitter culture.