Cybercrime Southeast Europe Newsletter No. 32

Dear Clients,

We bring you another example of how cryptocurrency fraud cases can be resolved. The investigation into Do Kwon, founder of Terraform Labs, demonstrates that judicial systems around the world are not powerless in the face of such challenges. Kwon, who once led one of the most renowned crypto ecosystems, is now facing serious charges and international investigations following the collapse of the Terra cryptocurrency, which caused losses worth billions of dollars.

The Rise and Fall of the Terra Ecosystem

The Terra ecosystem, built around the stablecoin TerraUSD (UST), promised decentralized financial services with an emphasis on stability and high returns. However, in May 2022, UST’s value collapsed, which also brought down the LUNA token, leaving thousands of investors with significant losses. The damage is estimated at over $40 billion, causing a global shock and shaking confidence in algorithmic stablecoins.

Investigation and Charges

Following the collapse, authorities from several countries, including South Korea and the United States, launched investigations against Do Kwon. He has been accused of fraud, securities law violations, and market manipulation. Despite his attempts to evade justice, Kwon was arrested in Montenegro in March 2023 while trying to leave the country using a fake passport. A final decision is awaited on his extradition to South Korea or the United States, as part of broader efforts to combat crime in the cryptocurrency world.

Impact on the Crypto Industry

This case is an example of how the legal system can tackle cryptocurrency fraud. In addition to holding those responsible accountable, regulators worldwide have increased oversight of stablecoins and crypto markets, leading to the strengthening of legal frameworks in this field.

The Do Kwon case clearly shows that, although risks in the crypto world are significant, justice can prevail when law violations are uncovered.

Your DefendMe Team