Who is Do Kwon, creator of the Terra and Luna cryptocurrencies?
Who is Do Kwon, creator of the Terra and Luna cryptocurrencies?
Do Kwon, the eccentric 30-year-old creator of the UST and Luna cryptocurrencies, solidified his status as one of the most recognizable figures in crypto, for all the wrong reasons.Kwon’s stablecoin, TerraUSD (UST), meant to always be worth $1, collapsed to as low as 13 cents last week and dropped to as low as nine cents this week . As a result, Kwon’s cryptocurrency, Luna, also collapsed, resulting in massive losses for investors . But who is Kwon, and how did he come to oversee a project that rose so rapidly and collapsed even faster—to the point that some compare him to Theranos’ Elizabeth Holmes or Enron’s disgraced CEO Ken Lay ?Kwon was born in South Korea in 1991 . He attended Stanford University starting in 2010, graduating with a computer science degree in 2015, according to his LinkedIn page . Little is known about his early life and college years, but a public website created by Do Kwon says he worked at a Microsoft “business partner” and at Apple , according to New York Magazine’s Intelligencer . In 2020, Do Kwon, under the pseudonym “Rick Sanchez” (from the animated show Rick and Morty), helped create the failed stablecoin project Basis Cash, CoinDesk reported . The failed algorithmic stablecoin shared similarities to his other project UST. Like UST, Basis Cash was designed to maintain a tie to the U.S. dollar through code instead of by holding reserves in cash and other less risky assets as backing. But Basis Cash never reached its dollar value , and its developers abandoned it.In 2018, Do Kwon founded Terraform Labs with a partner Daniel Shin, who later left the company. Almost immediately, Terraform started seeing interest from investors. The startup raised $150 mi l lion in funding from investors like Arrington Capital, Pantera Capital, and Galaxy Digital.In August 2018, Terraform Labs also raised another $32 million to create a “modern financial system on the blockchain,” according to VentureBeat. The company had high-profile backers like the investment arms of four of the six largest crypto exchanges globally at that time: Binance, OKX, Huobi Group, and Upbit. Between 2018 and 2021 investors Arrington Capital and Coinbase Ventures have put more than $200 million into projects built using Luna’s underlying technology, the New York Times reported , citing PitchBook.Many of these investors lost big after UST and Luna’s collapse. Binance CEO Changpeng Zhao said this week that his company’s 2018 $3 million investment in Luna rose to about $1.6 billion at Luna’s peak price in April but was worth less than $3,000 after the crash. But not all investors lost out after the crash. Pantera Capital said it earned $170 million from an original $1.7 million investment after selling about 80% of its Luna holdings over the past year, the New York Times reported. After successfully raising money for his startup, Kwon made Forbes ’ 30-under-30 list , partly because as Forbes reported at the time he had attracted “40 million users to work with the company at launch in January 2018.” After trading for around $1 for years , in January 2021, Luna, the sister cryptocurrency that was designed to help the UST stablecoin keep its dollar peg, started increasing in value. By the end of December 2021 Luna had risen to $99 and in April reached a high of $119, according to CoinMarketCap . Following concerns about how his algorithmic stablecoin would keep its dollar peg, Kwon announced that he planned to buy $10 billion in Bitcoin to back UST . Always carrying himself with confidence, Kwon was especially critical of his competitors and detractors on social media. In a December 2020 tweet Do Kwon criticized investors who were putting money into other stablecoin projects, saying that UST was the oldest and most widely used stablecoin in existence. “Bow before the king,” he said in the tweet.Kwon also had a penchant for calling naysayers of UST and Luna “poor” and saying they would “stay poor” for not supporting him or his cryptocurrencies.In reply to tweets by British economist Frances Coppola in July that were critical of decentralized finance, Kwon responded , “I don’t debate the poor on Twitter , and sorry I don’t have any change on me for her at the moment.”About a week before Terra lost its peg to the U.S. dollar, Kwon ironically bragged that “there’s also entertainment in watching companies die.”
