Despite Do Kwon facing the music about the Terra fiasco, he seems to be quite optimistic about the future. The Terraform Labs CEO recently expressed “great confidence” in rebuilding the empire that crashed last month. Despite the crypto market’s recent bearish trajectory.
Despite issues with enraged investors in loss and multiple government investigations, Do Kwon recently told: The Wall Street Journal,
“I am very confident in our ability to rebuild even stronger than we once were.”
Following the collapse of LUNA and its stablecoin TerraUSD (UST), the blockchain was reshaped in a rebirth proposal that was supported by 65.5% of the vote. The proposal, which was passed in late May, paved the way for a new blockchain called Terra, while the old version was rebranded as Terra Classic.
According to Kwon, a large number of developers are now working on relaunching apps in the new chain.
Trials and trials
However, a full recovery plan could not avert all problems. The South Korean entrepreneur has been accused by many of fraud and illegal fundraising. Investigations into this are reportedly being led by the Seoul District Attorney’s Office in the Southern District.
Less than a week ago, a lawsuit was also filed by a Chicago investor who suffered losses in the Terra episodes. The class-action lawsuit accused Kwon and Terraform Labs of selling unregistered securities. The other companies charged in the same case are Jump Crypto, Jump Trading and Three Arrows Capital. The lawsuit alleged that the two assets that imploded last month resembled securities and were promoted via misleading information.
“In addition to selling unregistered securities with the Terra Tokens, Defendants have made a series of false and misleading statements about the Terra ecosystem’s largest digital assets by market cap, UST and LUNA, to incentivize investors to buy these digital assets against buy high rates. †
Terraform Labs dismissed the lawsuit as unfounded and confirmed that it intends to defend itself. That’s not all for Kwon and his company, though. In May, law firm LKB & Partners sued him on behalf of investors who lost money in the collapse of the UST. As there were also involved investors within the company, a lawsuit was filed with the Financial Investigation Unit of the Seoul Metropolitan Police Agency.
Recently, Korea’s financial crime unit also blocked current and former Terra developers from leaving the country. According to reports, the travel embargo was imposed subject to additional investigative actions such as searches, seizures and subpoenas for the individuals involved.
An insane move
Many in the crypto community believe that Do Kwon is running a sophisticated scam. For example, Mati Greenspan of Quantum Economics doesn’t understand how “anyone in their right mind would want to invest in LUNA 2 after seeing LUNA 1 explode so dramatically.”
The new LUNA, which started on May 28 for $18.87, is now changing hands for $1.98 according to CoinGecko.
Cory Klippsten, the CEO of cryptocurrency firm Swan Bitcoin, was quoted as calling Kwon “a fraudster” in the WSJ article. Kwon rejected this characterization and clarified the difference between failure and fraud by saying:
“I made confident bets and made confident statements on behalf of UST because I believed in its resilience and its value proposition. Since then I have lost these bets but my actions match my words 100%. There is a difference between failure and fraud.”
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