On August 12, 2025, inside the Manhattan Federal Court in New York, Do Kwon, dressed in a yellow prison jumpsuit, slowly rose to his feet.

Years of being on the run and a life behind bars had significantly transformed his once-round cheeks into a much leaner version, and his hairstyle had morphed into the standard-issue prison buzz cut. The eyes that used to sparkle in front of cameras now only showed weariness.

This 33-year-old Korean man, once the darling of the crypto world, was now the central figure in the largest financial fraud case in history.

In a courtroom sketch, Do Kwon had his head bowed, hands clasped tightly. He confessed, saying, "In 2021, I made false and misleading statements about the TerraUSD re-anchor. What I did was wrong, and I want to apologize for my actions."

Now, he faced years of imprisonment and hefty fines, but for the hundreds of thousands of investors who lost $40 billion due to him, it was far from sufficient.

Time is the cruelest judge; it not only altered Do Kwon's appearance but also utterly destroyed everything he once had.

Prosecutor Damian Williams said outside the court that this plea was a "significant milestone in cryptocurrency fraud enforcement." However, the word "milestone" sounds too cold, unable to mend those broken families, comfort the elderly who lost everything, or save the young people who chose to end their lives.

From an elite school in Seoul to Stanford, from skyscrapers in Singapore to a dilapidated prison in Montenegro, Do Kwon's life trajectory resembled a parabola, rapidly rising, falling, and eventually shattering into pieces.

The Birth of a Genius

From Seoul to Silicon Valley

On September 6, 1991, Do Hyeong Kwon cried for the first time in a hospital in Seoul, South Korea. No one foresaw that this baby would, 30 years later, become one of the most controversial figures in global financial history.

He was born into a typical middle-class Korean family where his father was an engineer, and his mother was a teacher. This combination symbolized a reverence for knowledge and a thirst for success in Korean society. South Korea is a country deeply plagued by educational anxiety, where children are immersed in competition from kindergarten. From a young age, Do Kwon displayed intellectual abilities beyond his peers, with his mathematical talent shining the brightest, as if numbers would automatically arrange themselves into the most elegant solutions before him.

He attended Daewon Foreign Language High School in Seoul, which is one of South Korea's most elite schools. Here, the brightest students in the country gather, spending the most crucial three years of their lives in this ivory tower. In the memories of his classmates, Do Kwon was always the first to finish homework and the one who most enjoyed challenging the teachers' views. His intelligence was very apparent, but even more so was his confidence. This kind of confidence might have been cute in the campus during adolescence, but it also sowed the seeds for a future tragedy.

At that age, he already believed he was different, believing he was destined for great things. High school Do Kwon was like a star accumulating energy, waiting to burst into a brilliant light on a bigger stage. And that stage was Stanford across the Pacific.

In 2010, 19-year-old Do Kwon boarded a flight to the United States. For a young Korean, getting into Stanford University meant that life would be completely transformed. Stanford University is located in the heart of Silicon Valley, the birthplace of countless tech legends.

The computer courses were not difficult for Do Kwon; what truly fascinated him was the entrepreneurial atmosphere pervading the place. Here, every student dreamed of becoming the next Steve Jobs or Mark Zuckerberg, where every idea could potentially turn into the next world-changing product. Silicon Valley has a unique magic that makes people believe technology can solve all problems, convincing young people that they can disrupt the world. Do Kwon was deeply infected by this culture.

At that time, Bitcoin had just been born not long ago, and the sharp Do Kwon began to delve into blockchain technology, reading Satoshi Nakamoto's whitepaper, and participating in related project development. While his classmates were still anxious about finding a job, Do Kwon was already pondering how to use technology to redefine money itself. In his view, the traditional financial system was archaic and inefficient, while blockchain technology represented the future.

The time at Stanford shaped Do Kwon's worldview. Here, he learned to think about problems in the language of technology, to view the world through the eyes of an entrepreneur. More importantly, he established a belief here: he was here to change the world.

In 2015, Do Kwon graduated from Stanford University. He was no longer the inexperienced youth from Seoul. He had become a confident young man, a dreamer who believed he could create miracles. His resume stated a Bachelor of Science in Computer Science from Stanford University, and in his heart burned the ambition to change the world.

Entrepreneurial Journey

Back in South Korea, Do Kwon faced a decision: whether to follow the path of most of his peers and join a large corporation like Samsung for a stable and respectable life, or embark on the risky journey of entrepreneurship. For a young man molded by the entrepreneurial culture at Stanford, the answer was clear.

In 2016, at the age of 25, Do Kwon founded Anyfi, marking his first venture into entrepreneurship. He aimed to use blockchain technology to allow users to share their WiFi networks and receive token rewards. To him, traditional telecom operators were monopolists, and Anyfi could disrupt this monopoly through technology, enabling ordinary people to benefit from the network infrastructure.

The project garnered some early attention and investment. Do Kwon started appearing frequently at tech events in Korea, introducing his project and vision. His speeches were passionate, and his vision sounded exciting. Under those spotlights, Do Kwon relished the aura of being a startup star. However, reality soon hit him hard. The Anyfi project faced numerous challenges, and the infrastructure at the time was far from mature enough to support such a complex application. The gap between technological ideals and business reality was much larger than Do Kwon had imagined.

By the end of 2017, Anyfi had to admit defeat. For any entrepreneur, this would be an extremely painful experience. Failure is bitter; it makes one question their abilities and reflect on their decisions. But Do Kwon saw it differently. He believed Anyfi's failure was due to bad timing, with the market not yet ready to embrace such an advanced concept and investors lacking the foresight to support such a project.

This mindset is known in psychology as "self-serving bias," where people tend to attribute success to internal factors (like their abilities) and failure to external factors (like bad luck).

For Do Kwon, rather than learning a lesson from failure, the "self-serving bias" not only did not deter him but also bolstered his confidence. He shifted his focus to the emerging field of decentralized finance, particularly stablecoins. He saw this as an opportunity to "redefine money itself" and to leave his mark on history.

In January 2018, a new company emerged in Singapore—Terraform Labs.

The co-founders of this company were Do Kwon and Daniel Shin, two young graduates from top universities, both passionate about blockchain technology and both believing they could change the world.

Choosing Singapore as its headquarters was a savvy decision. This city-state is not only the financial hub of Asia, with a robust financial infrastructure and an internationally diverse talent pool, but more importantly, it has adopted a relatively open regulatory stance towards blockchain technology. Singapore encourages innovation, simplifies regulations, providing an ideal growth environment for startups like Terraform Labs.

Their core idea sounds simple: to create an algorithmic stablecoin system that combines the decentralization of Bitcoin with the stability of the US dollar. This system consists of two tokens: TerraUSD (UST) is the stablecoin, aimed at maintaining a 1:1 exchange rate with the US dollar; Luna is the governance token used to maintain the system's stability.

The relationship between the two is like a seesaw: when the price of UST is above $1, the system mints more UST and burns Luna, increasing the supply of UST to lower its price; when the price of UST is below $1, the system burns UST and mints Luna, reducing the supply of UST to raise its price.

This mechanism does not require bank deposits or government bonds as reserves; it relies entirely on the market and algorithms to maintain stability.

Do Kwon has likened this system to a "gravity well of the digital world," calling it a revolution in monetary history. In his view, traditional stablecoins are like balloons tied to a string, while UST is like a planet with its own gravity that can naturally maintain a stable orbit.

Do Kwon demonstrated outstanding persuasive abilities during the fundraising process. He was able to explain complex technical concepts in a clear and concise manner, paint a grand and enticing vision. More importantly, he was able to make investors believe that he was the one who could realize this vision. In August 2018, Terraform Labs completed a $32 million seed round financing, with investors including Binance Labs, Polychain Capital, Coinbase Ventures, and other well-known institutions. These investments not only provided financial support but, more importantly, gave the project authoritative endorsement.

In April 2019, the Terra blockchain was officially launched. This day held special significance for Do Kwon, marking his transformation from a failed entrepreneur to a leader poised to change the world.

At the same time, Terraform Labs began building around Terra's ecosystem. They launched the Terra Station wallet, allowing users to easily store and transfer Terra tokens. They partnered with a South Korean e-commerce platform to enable users to shop using Terra tokens. They also started developing various decentralized applications to increase the demand for UST.

By the end of 2020, the Terra ecosystem had begun to take shape. The market capitalization of UST reached hundreds of millions of dollars, and the price of Luna was steadily rising. More importantly, an increasing number of users started using Terra's various services. In the cryptocurrency community, Do Kwon was hailed as a pioneer of algorithmic stablecoins, and the Terra project was seen as one of the most promising projects in the DeFi space.

In such an environment, Do Kwon and his Terra empire continued to expand rapidly, moving towards greater success and deeper abyss.

Building a Towering Skyscraper from the Ground Up

Of Gold and Dross

2021 was a watershed year for Do Kwon's destiny.

During this year, he launched the Anchor Protocol, a lending protocol that promised a 20% annual yield for UST deposits. In the traditional financial world, such a yield is unimaginable, and even the most aggressive hedge funds would find it difficult to sustain such high returns.

In Do Kwon's vision, the Anchor Protocol was the core engine of the Terra ecosystem. The high yield would attract a large amount of capital, increase the demand for UST, drive up the price of Luna, and create a positive feedback loop.

However, this logic had a fatal flaw.

A 20% yield requires real economic activity to support it. To sustain this promise, the Anchor Protocol needs approximately $6 million in subsidies every day. These subsidies mainly come from the Luna Foundation Guard (LFG), a foundation controlled by Terraform Labs.

In other words, the high yield of the Anchor Protocol is essentially a Ponzi scheme, using new investors' money to pay old investors' returns. But Do Kwon never describes it this way. In his speeches, the Anchor Protocol is the "future of decentralized finance" and the "terminator of the traditional banking industry."

In early 2022, Anchor Protocol's TVL exceeded $14 billion, making it one of the largest DeFi protocols at the time. Global investors flocked in and poured their funds into it. The enthusiasm and trust of these investors delighted Do Kwon. He began to believe that he had truly created a miracle, that he had indeed found the Holy Grail of the financial world.

At the same time, Do Kwon also launched the Mirror Protocol, a synthetic asset platform. In public promotion, this platform was described as "completely decentralized," with no individual or entity able to unilaterally control the protocol. However, reality was different. According to a later SEC investigation, Do Kwon was actually secretly maintaining control of the Mirror Protocol. He could unilaterally modify protocol parameters, decide which synthetic assets to add or remove, and even pause the entire protocol.

A more severe fraud was Chai. Starting in 2019, Do Kwon claimed on various occasions that Chai used the Terra blockchain to process transactions, with transaction volumes reaching "billions of dollars." This claim was included in pitch decks, used in media interviews, and cited as a key example of Terra's practical use cases. Investors were truly persuaded by this data, especially since most blockchain projects were just concepts, whereas Terra seemed to have a real-world application.

According to the SEC's investigation, this too was false.

Transactions on the Chai platform were actually processed through the traditional financial network, unrelated to the Terra blockchain. Do Kwon and the executives of Terraform Labs were fully aware of this fact but continued to make misleading statements to investors. This was intentional fraud, but to Do Kwon, as long as it could attract more investment and drive up the token price, some "details" could be overlooked.

Pride and Prejudice

Success made Do Kwon extremely arrogant.

In July 2021, when British economist Frances Coppola criticized the design flaws of algorithmic stablecoins on Twitter, Do Kwon responded: "I do not argue with poor people, sorry I don't have spare change to give her at the moment."

This statement was an insult to a scholar and a declaration of war on all critics. In his view, wealth equated to correctness, and those who criticized him were not reasonable but simply "poor." This remark caused a huge uproar on social media. Supporters cheered for Do Kwon, seeing it as a powerful response to traditional scholars. Meanwhile, critics believed it exposed his true nature—an upstart whose mind had been clouded by success.

Similar controversial remarks abound. When someone questions Terra's sustainability, Do Kwon would say, "They're all now poor." When someone worries about the risk of algorithmic stablecoins, he would mock, "Have fun staying poor."

Driven by this mindset, Do Kwon became increasingly isolated. Few around him dared to voice differing opinions, and even if someone raised questions, he would rebut them with his wealth and success. This environment further entrenched his arrogance and pushed him further away from reality.

On April 17, 2022, Do Kwon announced the birth of his daughter on Twitter, writing, "Baby Luna, my dearest creation, named after my greatest invention."

This statement sparked controversy once again. Supporters saw it as a reflection of his confidence in the project, but critics viewed it as extremely narcissistic. A father naming his daughter after his own business project is highly unusual. What is even more unusual is his description of this project as "my greatest invention."

In Do Kwon's eyes, Terra is not just a business project but also a manifestation of his personal genius, a legacy he leaves to the world.

In April 2022, the Terra ecosystem reached unprecedented heights. UST's market cap surpassed $18 billion, Luna's market cap exceeded $40 billion, and the total ecosystem value approached $60 billion.

Do Kwon became a superstar in the crypto world. Major media outlets scrambled to report his story, various conferences invited him to give keynote speeches, and numerous investors hoped to collaborate with him. On these occasions, Do Kwon always wore meticulously tailored suits, expensive watches, and a confident smile on his face.

Beneath the surface prosperity, risks continued to build up.

Some keen observers had begun to notice issues. Anonymous researcher FatMan posted a series of analyses on Twitter, pointing out the unsustainability of the Anchor Protocol. Economist Nouriel Roubini warned of fundamental flaws in algorithmic stablecoins. Even some influential figures in the cryptocurrency community started to question Terra's long-term prospects.

Do Kwon disregarded these criticisms. To him, they were merely the envy of failures. This blind self-confidence would soon exact a heavy price on him.

In May 2022, on a sunny spring day in Singapore, Terra's office was bustling. Employees were preparing for an upcoming product launch, and investors were continuously pouring in money. No one realized that an unprecedented financial tsunami was about to hit.

Do Kwon leaned back on the office couch, in his mind he was a hero changing the world, a figure to be remembered in history.

History would indeed remember him, but not as a hero.

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