DO KWON is one of the most notorious names in the cryptosphere.
In a matter of just days in May 2022 he went from being a blockchain messiah to the most hated man in cryptocurrency after his Luna coin crashed the decentralised financial markets.
But what is the story behind the Luna founder? And what is the Terra creator’s net worth?
What is the story behind Do Kwon?
Do Kwon – whose full name is Kwon Do-hyung – was born on September 6, 1991 in Seoul, South Korea.
A bright child with clear potential, he attended the Daewon Foreign Language High School in the South Korean capital before he went on to study computer science at Stanford University in the US.
After graduating in 2015, Kwon looked set for a career working in big tech, taking up a job in America as an engineer for Apple before joining Microsoft just three months later.
He has openly spoken about being bored by his work at the firms, admitting: “I was just working on side-projects full time, doing nothing.”
By the end of the year he was back in South Korea with plans to start a company of his own.
The entrepreneur founded a tech communication company called Anyfi in 2016, which at the time he said would solve a “real problem” by using a mesh network to relay bandwidth to those without internet access. Kwon raised $1million in grants from angel investors and the South Korean government.
Just like his stints at Apple and Microsoft, Kwon’s time at Anyfi was short. In October 2017, just one year and ten months after he started the company, he stepped down as CEO.
Kwon had his eyes on the blockchain.
“I sort of fell down the crypto rabbit hole,” he said in an interview earlier this year explaining his switch in priorities.
“I started to think about what are some of the ways in which we can construct better currency, specifically designed for a decentralised internet.”
In January 2018, working in an AirBnB with his college friend Nicholas Platias, Kwon started the blockchain payment platform Terraform Labs that would go on to host the much ill-fated Luna coin.
Terraform Labs was quick to raise investment with $150million in funding raised at the outset, with another $32million added just six months later.
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In 2019 Terraform Labs launched its Luna cryptocurrency and Kwon was named in Forbes’ 2019 30-under-30 list as his meteoric rise continued.
In just three years Luna saw its popularity explode with the coin becoming one of the world’s top five cryptocurrencies in 2022, with its market cap of $45billion.
Loyal investors started referring to themselves as “Lunatics” as they saw their funds go from strength to strength.
Kwon became increasingly confident and complacent about the coin as his success grew.
In March 2022 he accepted a bet worth $10million on social media from an investor who claimed Luna would crash over the next year.
“Cool I’m in,” he nonchalantly replied.
The next month he announced the birth of his daughter, also called Luna: “My dearest creation named after my greatest invention.”
At the start of May 2022 he even mocked other cryptocurrencies that had failed, saying in an interview: “95 percent are going to die but it’s also entertaining to watch those companies die too.”
But just nine days later his own crypto project was in tatters.
Why did Do Kwon’s Luna crash?
Luna saw its price collapse almost overnight on May 9, 2022, causing a wider crash across all crypto markets.
In just 48 hours its trading price dropped by 99.9 percent from $120 to $0.02.
Do Kwon’s cryptocurrency was linked to the TerraUSD algorithmic stablecoin that was meant to always remain pegged to the value of one US dollar and therefore avoid huge fluctuations in price.
It was designed so that if $1 of TerraUSD was burnt, $1 of Luna would be minted, and visa-versa. The two would always remain in equilibrium.
However, on May 7 a number of large withdrawals of TerraUSD were made all at once, triggering panic. As much as $4billion is thought to have been dumped in a matter of just hours.
The large withdrawals decoupled TerraUSD from the US dollar, snapping the equilibrium with Luna and breaking the entire system.
What is Do Kwon’s net worth?
Prior to the crypto crash in May, Do Kwon’s net worth was estimated to be as much as $50billion.
However, after Luna collapsed into a death spiral, the crypto entrepreneur’s own investments were severely hit.
Kwon is now thought to be worth $10billion, with his net worth plummeting 80 percent following the demise of Luna.
However, his net worth may take a further hit in the months ahead.
Investors in Terra have launched class action lawsuits against Kwon and his company, accusing him of misleading them about the risks of purchasing the digital assets.
If the court cases are successful, Kwon will face hefty bailouts.
Is Do Kwon going to jail?
There have been plenty of demands from furious investors that Do Kwon face criminal prosecution for the collapse of Luna and the wider crypto crash. However, legal experts have said no such trial will probably take place.
While they suggest the civil class action law suits could be successful, legal experts say the threshold of proof of criminal intent is far higher and therefore less likely.
Randall Eliason, a law lecturer at the George Washington University Law School and former assistant US attorney for the District of Columbia, said: “When hedge funds and others lose a lot of money, it doesn’t mean there’s fraud.
“Prosecutors would need some evidence that it’s not a bad idea or spectacular failure.”
He added: “We’re trying to prove what was going on in someone’s mind.
“That’s often a very painstaking process that involves reviewing lots and lots of documents, and talking to many, many people and dealing with all their lawyers through that process and scheduling grand jury time and court appearances.
“It can really drag on, so no one should expect anything to happen overnight.”
Kwon has always denied deliberately misleading investors and accusations Luna was a “Ponzi scheme”, however, he has admitted responsibility for the failure of the cryptocurrency.
“You’ve got to put yourself in the shoes of a founder, and the ecosystem is inching close to $100 billion. If you’ve had a series of wins and you get to that scale, then like you almost don’t think that you could fail,” he said in an interview shortly after the market crash.
“For Terra stablecoins, it was working beautifully throughout the entire history that it was, and the fact that it was working perfectly was visible in the order books and was present in all the integrations in the open source and transparent matter of crypto until it stopped working.”
He added: “I, and I alone, am responsible for any weaknesses.”