Do Kwon pleads not guilty to US fraud charges in $40B crypto collapse | Hacker News Reader

Do Kwon pleads not guilty to US fraud charges in $40B crypto collapse

reuters.com

56 pointsgnabgib52 comments

As someone who lost around 50,000 in the terra/luna collapse, I do believe a lot of it is on Do Kwon. He was the one that kept the Anchor flywheel at unsustainably high APR, moved more UST to refill the reserves and so on. He also ignored warnings of a death spiral and continued with advertising unrealistic expectations.

When the depeg happened, Do Kwon was front and center on making it sound like everything was under control, instead of damage control. And his creation of LUNA2 is even more of a joke for the people that lost money on this.

Is it his fault that it collapsed? Maybe not directly, but he steered the boat.

It doesn’t matter how hard you tug at your bootstraps or how fast, you’re not going to avoid the splat once you’ve stepped off a bridge over a chasm.

The Terra/Luna implosion was inevitable. Actions by Do Kwon may have hastened or delayed the end, but could not have prevented it.

Believing otherwise is a pure fantasy…

… but that’s the whole point, isn’t it? For a short time people really wanted to believe that one fantasy can prop up another fantasy and the construct of the two can somehow become real.

I watched the Neverending Story too when I was a kid.

It ended.

I wonder if there are people who made it their business to short hype coins.

Yes - see the shady character behind the Hawk Tuah meme coin - son of some famous actor who was a judge on The Voice.

It was the same algorithm as Iron finance on Polygon the year before which imploded in the exact same way but on a more expedited timeframe because it didn't limit the apy at 20%.

The terra/luna collapse was simple to see coming as it happened exactly when the terra (stablecoin) market cap met the luna one.

The figure "$40B" is bandied about uncritically in the press, but I gather this is the highest notional market cap of Terra/Luna, not a reflection of actual money (fiat) put in?

By contrast, SBF of FTX fame was convicted of stealing $8.7B and ordered to restitute the amount to investors in USD.

I still remember Do running away from FTX right after meeting with SBF, a few days before it fell apart. That was before the "a $4.55 billion settlement that he and Terraform reached with the U.S. Securities and Exchange Commission.". The $40 billys is the losses due to fluctuation in value.

It's possible they are pressuring him to release information on crypto holdings that were transacted with Iran and other sanctioned entities.

Ok? And? If you rob a bank and walk out with $10k you’re facing 15+ years in prison. If the number is “Only” $1b he should spend the rest of his life in prison.

How about the death sentence if it exceeds a certain number of victims or dollar amount?

Executing these fools might act as a deterrent.

What is the SEC going to do with the $4.55B settlement?

Give it to all the people that lost money in the scam? Isn't that generally what those settlements are for?

If it's a fine, it probably goes to the United States Treasury or the SEC's budget. I also wouldn't be surprised if the settlement was not fully paid.

Here’s how the SEC themselves talk about their thought process around settlements https://www.sec.gov/newsroom/speeches-statements/clayton-sta...

It’s basically usually some mix of fine and restitution, with the bulk going to restitution in these sorts of cases but with more fine in cases where the defendant should have known better (eg settlements with big banks) but the actual nominal loss to investors is lower than the regulator believes the firm should have to pay up.

Does this mean he has to participate in the Squid Game?

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