As someone who lost around 50,000 in the terra/luna collapse, I do believe a lot of it is on Do Kwon. He was the one that kept the Anchor flywheel at unsustainably high APR, moved more UST to refill the reserves and so on. He also ignored warnings of a death spiral and continued with advertising unrealistic expectations.
When the depeg happened, Do Kwon was front and center on making it sound like everything was under control, instead of damage control. And his creation of LUNA2 is even more of a joke for the people that lost money on this.
Is it his fault that it collapsed? Maybe not directly, but he steered the boat.
It was the same algorithm as Iron finance on Polygon the year before which imploded in the exact same way but on a more expedited timeframe because it didn't limit the apy at 20%.
The terra/luna collapse was simple to see coming as it happened exactly when the terra (stablecoin) market cap met the luna one.
It doesn’t matter how hard you tug at your bootstraps or how fast, you’re not going to avoid the splat once you’ve stepped off a bridge over a chasm.
The Terra/Luna implosion was inevitable. Actions by Do Kwon may have hastened or delayed the end, but could not have prevented it.
Believing otherwise is a pure fantasy…
… but that’s the whole point, isn’t it? For a short time people really wanted to believe that one fantasy can prop up another fantasy and the construct of the two can somehow become real.
I watched the Neverending Story too when I was a kid.
The figure "$40B" is bandied about uncritically in the press, but I gather this is the highest notional market cap of Terra/Luna, not a reflection of actual money (fiat) put in?
By contrast, SBF of FTX fame was convicted of stealing $8.7B and ordered to restitute the amount to investors in USD.
I still remember Do running away from FTX right after meeting with SBF, a few days before it fell apart. That was before the "a $4.55 billion settlement that he and Terraform reached with the U.S. Securities and Exchange Commission.". The $40 billys is the losses due to fluctuation in value.
It's possible they are pressuring him to release information on crypto holdings that were transacted with Iran and other sanctioned entities.
Ok? And? If you rob a bank and walk out with $10k you’re facing 15+ years in prison. If the number is “Only” $1b he should spend the rest of his life in prison.
It’s basically usually some mix of fine and restitution, with the bulk going to restitution in these sorts of cases but with more fine in cases where the defendant should have known better (eg settlements with big banks) but the actual nominal loss to investors is lower than the regulator believes the firm should have to pay up.
It is wholly appropriate for a government act to protect it's citizens' rights including their property rights. Fraud and theft violate those rights.
Your arguments are essentially shifting blame from the fraudster to the victim... not unlike the kind of arguments that suggest certain rapes or murders are also the victim's fault for either dressing suggestively or travelling through the wrong part of town at the wrong time. While those things may actually be unwise, that the victim didn't act with wisdom or prescience doesn't relieve the perpetrator of culpability nor make the victim deserving of such violation. Wisdom merely dictates that it might be better for you to avoid the risk of becoming a victim if you can.
I personally don't engage in these kinds of financial instruments because I feel the risks are pretty high.... but I absolutely applaud the government pursuing a fraudster where ever they can... without regard to the wisdom, or foolishness, of the victim.
Yes and the government is defrauding me claiming this is effective governance and stealing from me to lock these guys up. They are violating my property rights in extraditing kwon.
You are victim blaming me for being unhappy with this.
Is it? There is a Korean poster bragging here about how happy they are to have offloaded kwon to the US for a free ride on us since they are too lazy to mete out full punishment of people operating on their turf.
We are a laughing stock. Dump your criminals on the US taxpayers to play world police.
I assume you're talking about my post. If you understood it as "Koreans are laughing at the US," then you need to work on your English comprehension skill.
I understood it as Korean common taxpayer being the real benefactor over the US common taxpayers, since Koreans can shirk the cost of punishing their own and offload it on me while still maintaining the moral high ground since they have a loftier sounding reason for not wanting to foot the bill.
Someone out there defrauded someone else, only by the greatest stretch did this even occur in even the same country I inhabit. Therefore I must agree to paying to lock up and internationally fly the perpetrator for something that happened in the other hemisphere for a transaction i am in no way connected to,or else I am a victim blamer who needs to take a walk.
You could take this general concept and apply it to literally any criminal prosecution you disagree with or may feel "disconnected from", domestically or internationally.
There are people who feel that a wrong should be righted, and there are those who may disagree. That's okay. Nobody is crazy for disagreeing. But that's what happens in this sorta system - sometimes, people think money is wasted if it's something that they disagree with. There will never be a way to make everyone agree with every prosecution, or use of tax dollars.
I would prefer something more akin to voluntarily funded prosecutions and jailing when they are extraterritorial. That way everyone who pays for something that happened outside where we even have representation at least agrees to it, since we have no real vote on the extraterritorial civil environment.
Would you also e.g. applaud Iran trying to extradite you if you watched a pornographic recording of an Iranian woman, even if recorded with her consent?
Would you applaud China for trying to extradite you for "spreading unrest and destabilizing the political situation in the country", AKA posting a meme offensive to their regime?
These are bizarrely different situations. The USG has jurisdiction given the definition of fraud, the role of the SEC, and how the company Terraform Labs was formed and operated.
Well, the US dollar is an instrument to serve the interests of the US people. Many Americans were harmed by the collapse, so the government is going to try to claw back what it can for its people. After all, doesn’t matter where you are in the world, if you’ve got USD in your hands, you’re subject to US law.
Lawmakers/prosecutors do know that they are unlikely to recover a majority of lost funds. They’re going to put this man behind bars as a deterrent to others who want to (allegedly) defraud Americans.
This is far more true than you know. Almost everyone in the west is subject to US law via our extra-territorial wire fraud or money laundering statutes that will get you as soon as anything ( read: most everything) you touch remotely touches the US banking system.
Do Kwon in bars makes zero material difference or deterrence to the next Do Kwon.
I understand the desire for justice, just sick of the government forcing me at gunpoint to pay to fly around these guys operating overseas stealing from people trying to operate outside the US financial system. Maybe they should take a charity donation for jailing foreign operating criminals and leave me out of it.
You don’t think “the US federal government will come after you if you conduct crime in USD and/or against Americans regardless of where you live/operate your business” is a real deterrent, as compared to “operate abroad and you can victimize Americans at will?”
What happens in reality is the US comes after me to pay to fly and feed these criminals, makes me pay for some prosecutor to get fat on steaks and braces on his kid, meanwhile I get basically fuck all for it other than to watch the next overseas crypto scammer take his place 5 minutes later.
I'm not saying you can't seek justice, i just want to be left out of it.
What evidence do you have extradition of crypto scammers has moved the needle at all on scamming? I'm not seeing the benefit you speak of, a new one pops up 5 minutes later to replace the last.
Oh man, the irony of this response. Do Kwon very specifically did NOT have USD in this situation, and I’m pretty sure his defense will be that there was no representation that the peg would be maintained indefinitely. Whether the evidence points to the contrary is another matter altogether.
>Do Kwon very specifically did NOT have USD in this situation
The indictment lists a bunch of ways that ties his crimes to the US
>KWON solicited and obtained investments from a number of investment firms in the United States and other locations [...]
>DO HYEONG KWON, the defendant, nonetheless fraudulently promoted Chai to investors in the United States [...]
>On or about October 12 , 2020, KWON sent an email to a representative of an investment firm based in New York containing a Terraform promotional document falsely claiming [...]
>On or about October 14 , 2019, KWON made a false and misleading statement during a CNBC presentation transmitted to, among other places, the Southern District of New York, about Chai 's usage of the Tena blockchain [...]
> When you export your electrons from the US, leaving US jurisdiction why must all us taxpayers suffer to protect you? Let the victims seek whatever justice they can find in whatever shithole they did business in.
"all us taxpayers" benefits from capital markets that aren't rife with fraudsters.
This is a preposterous premise in Kwon's case considering the US ripped away competing extradition from his home country and place of part time management of fraud, South Korea.
As a South Korean, I can ensure you that you won't find a single South Korean online who's upset that our country is "robbed" of the chance to give Kwon a slap in the wrist. When it was announced a while ago that Kwon was coming the South Korea, the disappointment was palpable.
Unfortunately South Korea is unreasonable lenient on financial crimes, Koreans all know it, and Kwon himself knows it. That's why he's been fighting to get extradited to Korea instead of the US.
I didn't say Koreas punishment would be effectual at securing our markets either. My answer implied it is not equal to shrugging of shoulders. Your false dichotomy here is totally illogical.
So US putting scammer in jail... "ineffectual", but South Korea doing the same is effectual? Are US prisons that much cushier that South Korean prisons?
To be clear I think jailing foreign crypto scammers is ineffectual at securing US markets but more cathartic to victims than shrugging shoulders.
At the very least there seems to be little to no evidence it moves the needle.
If you asked me I'd say most effectual would be a combination of public announcements on avoiding crypto scams and a revival of banking secrecy with no kyc or AML, as that would steal massive capital from crypto markets and scammers.
When the depeg happened, Do Kwon was front and center on making it sound like everything was under control, instead of damage control. And his creation of LUNA2 is even more of a joke for the people that lost money on this.
Is it his fault that it collapsed? Maybe not directly, but he steered the boat.