Do Kwon, co-founder of Terraform Labs insists that he believes in the Terra ecosystem’s resilience. Terraform Labs co-founder Do Kwon said he was devastated by last month’s collapse in TerraUSD (UST stablecoin) and its sister token . He expressed his hope that the thousands of Terra ecosystem investors that were affected by the implosion of Terra will “take care of themselves.”
Kwon claimed that he lost almost all of his net worth due to Terra’s crash. He also rebutted claims that the project was fraudulent.
Kwon stated that he made confident bets on behalf of UST and made confident statements because he believed in its resilience, and its value proposition. Although I’ve lost these bets since then, my actions match 100% of my words. It is not the same thing as running a scam.
Kwon’s crypto holdings made him a billionaire when LUNA was trading at around $100 earlier in the year. Kwon said that losing the majority of his net income “doesn’t bother” him because he lives a relatively frugal lifestyle.
After UST–the project’s algorithmic stabilitycoin lost its parity to USD, the Terra ecosystem collapsed last month. It was meant to maintain a 1:1 peg with the U.S. Dollar. The Terra ecosystem plummeted to just 13 cents.
LUNA (since renamed LUNC), once a top ten crypto that was used to stabilize UST’s price, crashed to a fraction a cent, wiping away billions in investor wealth.
Terra and regulators
The regulatory scrutiny has been drawn to the Terra ecosystem’s collapse. The Securities and Exchange Commission (SEC), in the United States, is reportedly investigating a possible breach federal investor protection rules related to UST marketing practices by Terraform Labs. Meanwhile, South Korean authorities have initiated a separate investigation into whether price manipulation and other issues may have contributed to the UST’s collapse.
Kwon, Terraform Labs and a class-action lawsuit were also filed last week in U.S. District Court Northern California.
The Terra community approved Terra 2.0 at the end May in the wake of the crash. This project included the creation of a new LUNA token.
Kwon stated that he has great confidence in the ability of the team to rebuild even stronger than before. He also said that many builders are “in the process” of launching new apps on the new chain.