Terraform Labs co-founder Do Kwon has taken responsibility for the UST/LUNA collapse, citing weakness in the design of the Terra network that triggered its fall.
The admission of guilt occurred during a new interview with Laura Shin on the Unchained Podcast, where the founder of the embattled stablecoin issuer Terraform Labs said he is taking responsibility for the crypto project’s multibillion-dollar collapse earlier in the year. He said:
“The $40 billion downfall of LUNA and its stablecoin TerraUSD (UST) are my responsibility and mine alone.”
Terra LUNA and TerraUSD Collapse
Terra co-founder amassed giant investors in the Terra project, including Galaxy Digital and Lightspeed Venture Partners. The crypto community also embraced LUNA crypto as a digital asset, which catapulted the token to a place among the leading ten cryptos by market cap.
Terra collapsed in May after a “deliberate and coordinated” attack that caused Terra’s stablecoin UST to deepen from its $1 value. This resulted in billions of dollars worth of losses and attracted massive regulatory attention from governments worldwide. South Korean authorities have brought charges against Kwon and other Terra leaders, even inviting Interpol to issue a red notice against Do Kwon. The Terraform Labs executive has now disclosed the challenges he is facing.
The Terra co-founder attracted massive criticism from the crypto
community, with some describing him as arrogant for his actions mocking industry competitors. Kwon is on record responding to Frances Coppola, saying he does not “debate the poor.” Coppola is a British economist who criticized the design of Terra’s algorithmic stablecoin.
Nevertheless, the demise of the Terra project appears to have brought Do Kwon to his knees. During the interview with Laura Shin, the Terra executive was asked whether he was remorseful for his “conceited” attitude. In his response, Kwon explained that he behaved in a particular way for entertainment. However, the Terra co-founder now looks back at his tweet with embarrassment. He added:
“Just because there are anonymous cartoon characters that are more liberal with the words they’re using does not mean that I should have followed suit. In my personal life, I am quite a bit of an introvert. When I started Terra, there was little communication with media or Twitter, which wasn’t necessarily a big problem.”
The TerraLUNA and TerraUSD stablecoin collapse marked one of the worst incidents in the crypto industry, leading to billions of dollars from the cryptocurrency market going down the drain. Many investors incurred huge losses, with some committing suicide, having lost unimaginable funds and life savings.
Kwon on taking full responsibility
Kwon has now come forward to take “full responsibility” for the incident, citing Terra network’s weak design. The admission of guilt was prompted by Laura’s question on whether he had anything to say to those affected by Terra’s disintegration. His response:
“Whatever issues existed in Terra’s design, its weakness [in responding] to the cruelty of the markets, it’s my responsibility and my responsibility alone. So for the community that engaged in the Terra ecosystem, used its apps, and sent tokens and coins into many protocols, the downfall of the companies that chose to build on Terra, for the hundreds of thousands, if not millions, that used Terra currency [and] the Terra ecosystem, which was all built on the stability of UST, I own up to that responsibility fully and it’s not easy.”
The executive, who has now been labeled as a fugitive of the law, also highlighted that the token could not survive the “cruel” conditions in the crypto market. With this acceptance of guilt, Kwon apologized for his response to charges pushed against him and his display of self-justification. Noting his belief in the stability of the UST stablecoin, the Terra co-founder said:
“I do apologize and own up, you know, the full responsibility of that.”
Kwon Insists On The Illegitimacy Of Charges
Nonetheless, Kwon remains firm that the charges brought against him by the authorities in South Korea were illegitimate, calling them out for being “politically motivated.” According to Do Kwon, he is yet to receive a copy of Interpol’s red notice issued in September.
During the interview, the crypto entrepreneur noted that he had requested to check the red notice’s status. He added, “..it is not necessarily an arrest warrant, and it states so explicitly on its website. Every sovereign nation can interpret Interpol’s red notice as it sees fit.”
The Terra executive went on to clarify that the last time he lived in South Korea was at the end of 2021, articulating that he has never lived there since. Nevertheless, Kwon remained secretive about his current location, expressing his concerns for his privacy and security.