This is Do Kwon, the biggest fraudster in the world of cryptocurrencies.
He deceived everyone with LUNA and disappeared with 40 billion dollars.
Yesterday he was sentenced to 15 years in prison.
Here are his secrets and crimes and how to recover your money 🧵👇
For the first time here, get to know Do Kwon.
He was previously known as the genius and the future of finance.
Created #Terra and #UST - one of the biggest stories in the world of cryptocurrencies.
As a result, it became a major symbol of systematic fraud.
And now he faces a prison sentence of 15 years.
Let's start from the beginning.
Do Kwon was born in Seoul, South Korea.
He was smart, ambitious, and quick-tempered since childhood.
In high school, he launched his own media outlet that spread to 60 schools.
By graduation, the project was already generating annual revenue of about $500,000 from advertisements in the education sector.
He later studied at Stanford University and gained a strong technical foundation from the university.
After university, he worked at leading tech companies - @Apple and @Microsoft.
But he quickly became disappointed with slow companies.
He wasn't interested in a stable career - no.
He was interested in scale, impact, and control - yes.
Cryptocurrency became the ideal environment for those ambitions.
He sparked the idea of decentralized money that excited Do Kwon.
Especially #stablecoins as the foundation of a new economy.
Thus formed the concept of the famous #Terra.
He launched the project with Daniel Shin in 2019.
The idea seemed revolutionary even for cryptocurrencies.
Algorithmic stablecoin $UST without real reserves.
Isn't this every investor's dream?
In fact, UST was not the stablecoin that everyone thought.
UST operated through its peg to the project's #LUNA currency.
If the price of UST drops below $1 -> #LUNA is burned.
If the price of UST rises above $1 -> $LUNA is minted.
As long as the market trusted the system and had no doubts, the system seemed stable.
Everything seemed to be going well.
At the beginning of 2022, Terra had already become a giant.
The market cap of UST and LUNA exceeded $50 billion.
But it was a fragile structure.
Do Kwon had to find a way to attract more people, money, and trust.
To enhance this trust, Do Kwon promoted the Anchor protocol.
Which promised an annual return of around 20% on UST deposits.
And it worked.
Within a few weeks, 70-75% of total UST there was frozen.
It was clear that the treasury had become richer, and everyone was happy until this happened.
On May 7, 2022, Do Kwon's team withdrew $150 million from Curve.
This decision was made within Terraform Labs.
Almost immediately, a large wallet sold about $85 million.
For an algorithmic stablecoin, such a change breaks trust.
This was the beginning of the end.
Once users saw the error, they began to exit Anchor en masse.
At that time, the price of UST dropped to $0.99 then $0.97 then $0.95.
The algorithm began to print LUNA in unlimited quantities.
But that didn't help at all.
On May 9, the price of UST was $0.35.
The supply of LUNA rose from 345 million to trillions within days.
The price dropped by more than 99%.
Exchanges halted trading and the blockchain was technically shut down.
Terra ceased to exist as a system.
Do Kwon walked away with $40 billion.
You may wonder how? How could he withdraw $40 billion?
Investigations revealed that the funds were withdrawn months before the collapse.
Some UST and LUNA were sold through related entities while liquidity was still available.
When the system collapsed, the money was no longer in the protocol - it was with Do Kwon.
In 2023, charges were directed against Do Kwon in the United States and Korea.
He was then arrested in Montenegro with forged documents.
He kept delaying delivery actions for two years, but that didn't save him.
But in 2025, the court recently issued its final ruling.
Do Kwon was sentenced to up to 15 years in prison for financial fraud.
It was officially recognized that the collapse of Terra was the result of deliberate actions.
"Startup failure" was reclassified as a crime.
As they say, there is no gain without pain.
