Do Kwon, the man who flew high with Terra and LUNA only to crash land in the cryptocurrency in a rather epic way. His story is one of the most infamous in the crypto space, and for good reason. But what about his net worth? How did it skyrocket to billions and then collapse like a crypto house of cards?
This article explains everything about Do Kwon’s net worth, the rise and fall of Terra, and all the juicy details in between.
Who is Do Kwon?
Born in Seoul, South Korea in 1991, Kwon Do-Hyung (aka Do Kwon) had a sharp mind from a young age. He was one of those technology prodigies we often hear about but never actually meet. After finishing high school at the prestigious Daewon Foreign Language High School, he studied Computer Science at Stanford University, graduating in 2015.
Do Kwon wasn’t just sitting around coding in his dorm room. He worked as a software engineer at tech giant companies including Apple and Microsoft. But Kwon’s aspirations in his field went far beyond a comfy job in Silicon Valley. In 2016, he launched his first startup, Anyfi, an e-commerce platform that helped overseas shoppers connect with Korean suppliers. Though that didn’t put him on the global map, it was the launchpad for what came next.
Terraform Labs: A Meteoric Rise
In 2018, Do Kwon co-founded Terraform Labs, the company behind the Terra blockchain and its native token, LUNA. Along with his co-founder Daniel Shin, Kwon envisioned creating a blockchain payment system that would help fiat-pegged stablecoins bring stability to the most volatile cryptocurrency market.
The real excitement came with the introduction of TerraUSD (UST), an algorithmic stablecoin that was pegged to the US dollar and backed by LUNA. Investors ate it up. Terraform Labs managed to raise $57 million from big-name investors like Binance, Coinbase, and Polychain Capital. By 2021, LUNA had risen big, hitting an all-time high of $116 for a token, and Kwon’s net worth increased with it.
By early 2022, he was sitting on top of a mountain of cash. According to different reports, Do Kwon’s net worth was estimated to be around $10 billion before the crash. Yes, that’s with a “b.” He was living the high life, and everything was going perfectly – but like any good drama, the twist was right around the corner.
The Fall: When LUNA and UST Imploded
The fall of Terra and LUNA is a moment that will forever be etched in the history of cryptocurrency. It all came crashing down in May 2022, when Terra’s stablecoin, UST, lost its peg to the dollar. This might sound like a small technical glitch, but considering stablecoins, it’s the equivalent of your airplane running out of fuel mid-flight.
What happened? Well, Terra’s Anchor Protocol, which was offering sky-high returns on UST deposits, began reducing interest rates. This spooked investors, leading to a rush to exit UST. At the same time, a mechanism designed to maintain UST’s peg – called the “burn-and-mint” system – malfunctioned under pressure. Investors who wanted to redeem UST for LUNA couldn’t move their funds fast enough, and it led to a liquidity crisis. The result? The value of LUNA and UST plummeted by over 99%, wiping out billions of dollars in wealth almost overnight.
Do Kwon’s Net Worth After the Crash
So, how does losing billions affect a guy like Do Kwon? Quite dramatically. Before the Terra crash, Kwon was a crypto billionaire, estimated to be worth $10 billion as already told above. But with the collapse of the Terra ecosystem, Kwon’s wealth took a nosedive. By 2024, his net worth is estimated to be around $135 million.
Don’t get me wrong – $135 million is nothing to sneeze at, but when you’ve lost 90% of your wealth, it probably stings a little. Kwon’s wealth wasn’t only tied up in LUNA and UST. He was involved in other ventures like Basis Cash, a lesser-known stablecoin project that also hit the rocks. Despite these setbacks, Kwon still managed to hold in millions, although much less wealth than what he had enjoyed before.
Controversies and Drama
What would a crypto collapse be without a healthy dose of scandal? Do Kwon isn’t only remembered for the Terra collapse. He’s also known for his cocky attitude and questionable behavior. Before the crash, Kwon loved to make outrageous bets. He reportedly took a $1 million bet that LUNA wouldn’t fall below a certain price and even wagered that UST wouldn’t lose its peg to the dollar. Oops.
Kwon was also accused of creating “shadow wallets” that reportedly held over $200 million worth of LUNA tokens, raising eyebrows and leading to even more speculation about his financial dealings. While these accusations remain unproven, they certainly didn’t help his reputation.
Where is Do Kwon Currently?
After the Terra collapse, Do Kwon became a wanted man. Authorities from the US and Korea were on the hunt for him, with some reports claiming that he fled South Korea. In 2023, he was arrested in Montenegro on the charges of trying to flee with forged documents and has since then been put into jail by the High Court, along with Terraform Labs executive Han Chang-Joon.
Kwon’s legal troubles don’t stop there. He’s currently facing multiple fraud charges in the United States, related to the Terra and LUNA collapse. The US Securities and Exchange Commission (SEC) has been investigating Terraform Labs since June 2022, and Kwon’s future looks murky at best.
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Lessons From the Terra Crash
So, what can we learn from the rise and fall of Do Kwon? First, the cryptocurrency industry is incredibly volatile, and even the most promising projects can fall apart at the seams. Second, the arrogance of founders can sometimes blind them to the risks they are taking. Kwon’s confidence in Terra was so unshakeable that he ignored clear warning signs – and we all know how that turned out.
Finally, the Terra debacle puts up a cautionary tale about algorithmic stablecoins. While they may be considered a future of finance, the risks involved in maintaining their stability can’t be overlooked. The crypto world has learned a tough lesson from Terra’s collapse, but we’ll likely see more advancements (and maybe a few more crashes) in the years to come.
Conclusion
Do Kwon’s net worth story is one for the ages. From billionaire to crypto fugitive, his journey has been filled with incredible highs and equally dramatic lows. As we look to the future, one thing is clear: Terraform Labs owner’s fall from grace is a big reminder of how fast fortunes can change in the crypto world. So, if you’re thinking of investing in the next stablecoin project, remember – it could be the ride of a lifetime, or it could all come crashing down.
Disclaimer
The information provided in this article is only for educational and informational purposes and should not be considered financial or investment advice. We are not licensed financial advisors. Always conduct your research and seek guidance from a certified financial professional before making any investment decisions.
