Do Kwon, the co-founder of Terraform Labs, is reportedly appealing the court’s decision to extend his detention time for up to 30 days. Kwon was arrested in Montenegro while attempting to fly to Dubai with fake documents.
Authorities typically allot detention for up to 72 hours, but Kwon’s 30-day extension was approved after prosecutors highlighted the high possibility of an escape.
The court considered that Do Kwon was a foreign national whose identity was not clearly identified. Kwon is suspected of moving between Singapore, Dubai, and Serbia by South Korean authorities.
Rise to fame and fall from grace
Kwon’s notoriety in the crypto industry stems from the dramatic implosion last year of his company Terraform Labs, which wiped out about $40 billion of investors’ money and shook global crypto markets.
He is accused of fraud, with his “algorithmic stablecoin” called Terra, said to be a glorified Ponzi scheme. United States prosecutors charged Kwon with fraud following his arrest, and Korea, where he faces separate charges, said it wants to extradite him.
Kwon’s rise to fame began in 2018 when he co-founded Terraform Labs with Daniel Shin. The company developed the TerraUSD and Luna currencies, and Kwon successfully branded himself as a young industry luminary.
TerraUSD (UST) was marketed as a “stablecoin,” a type of cryptocurrency typically pegged to stable assets such as the U.S. dollar to prevent drastic price fluctuations. Kwon’s achievements earned him a spot in Forbes’ 30 under 30 Asia list in 2019.
However, Kwon’s fame ultimately led to his downfall. His story is a product of our times, where he knew how to win the hearts of those who so desperately wanted to make a fortune in one stroke, and he knew how to exploit their anxiety and turn it into massive profits. This led to the collapse of the Terra ecosystem and his subsequent arrest.
Cho Dong-keun, an economics professor emeritus at Myongji University, believes that Do Kwon’s legal troubles demonstrate the importance of ethics and accountability in the crypto industry. As the industry continues to grow, it must ensure that it does not sacrifice these principles in pursuit of profit.
The need for better regulation
Do Kwon’s arrest also highlights the need for better regulation in the crypto industry. The use of fake documents is a reminder that not all participants in the industry have the best intentions.
The industry must ensure that regulations are in place to prevent bad actors from exploiting the system.
The legal troubles facing Kwon also highlight the need for investors to exercise caution when investing in new projects. Kwon’s story serves as a reminder that investors must do their due diligence and thoroughly research the projects they invest in.
Kwon’s legal troubles and subsequent arrest highlight the need for ethics, accountability, and regulation in the crypto industry. While his story may be a product of our times, the industry must ensure that it does not repeat the mistakes of the past.