Cryptocurrency is the modern-day casino, with some people becoming millionaires overnight while others lose everything they own. The markets collapsed in the second week of May, with Bitcoin, Ethereum, and other cryptocurrencies all down significantly, prompting Binance to cease trading. This sell-off was sparked by the stablecoin TerraUSD, also known as UST in the market, losing its peg to the US dollar and wiping out the support of its non-stable coin partner Luna, which plunged 99 percent in just a few days, losing billions of dollars.
The main source of concern is that this occurred with a Stablecoin, which is meant to be pegged to real-world currencies and operate as a safe haven for crypto investors.
How did Luna fall?
Customers attempted to cash out their money, but the algorithms couldn’t keep up, forcing the Luna foundation guard, a crypto group, and its operator to sell their Bitcoin reserves to save the Stablecoin, which pushed the value of BTC down and disrupted the entire market.
Read more about Luna’s fall: Will Luna and UST Ever Recover?
Who is Do Kwon?
Do Kwon, a 30-year-old Singaporean and Stanford dropout came up with the idea for the coins and debuted them in 2018. Both Terra and Luna are designed to function as a balancing mechanism, with one automatically creating or destroying the other based on supply and demand.
What are the allegations faced by Do Kwon?
Do Kwon is accused of cashing out $2.7 billion in the months leading up to the Luna UST collapse, though this has yet to be verified. This is a hot topic in the crypto realm, and it’s trending across multiple platforms.
The claim in the photo is against Do Kwon, who is already under investigation by the Securities and Exchange Commission of the United States and the Seoul Metropolitan Police Department. FatMan Terra is the one who made this allegation. Do Kwon was able to succeed, FatMan claimed in a series of tweets on Saturday, thanks to Degenbox, a borrowing mechanism that allows users to loop stablecoin purchases.
What did Do Kwon have to say in response to the allegations?
The entrepreneur asked the cryptocurrency community not to spread the rumor until it was proven. “This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false,” Do Kwon wrote on Twitter. Kwon went on to say that the recent allegations against him of withdrawing $80 million per month contradict his statements. He also said that he is still in the possession of most of his holdings for LUNA.
1/ This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false
— Do Kwon ? (@stablekwon) June 12, 2022
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