Do Kwon: S Korea’s crypto ‘genius’ now disgraced fugitive
Once hailed as a genius, South Korean entrepreneur Do Kwon — now facing multiple criminal charges over his failed cryptocurrency — was a brash industry figure whose fame disintegrated into global notoriety. After months on the run, the 31-year-old, whose full name is Kwon Do-hyung, was arrested Thursday in Montenegro after being caught trying to catch a flight using fake Costa Rican travel documents.
He is accused of fraud over the dramatic implosion last year of his company Terraform Labs, which wiped out about $40 billion of investors’ money and shook global crypto markets. Immediately after his arrest the United States hit him with a slew of charges over what they called a “multi-billion-dollar crypto asset securities fraud” and South Korea, where he faces separate charges, said it wants to extradite him. The cryptocurrency he created, an “algorithmic stablecoin” called Terra, was in reality a glorified Ponzi scheme, experts say. Yet as recently as March 2022, Kwon was being described in glowing South Korean media reports as a “genius” as thousands of private investors lined up to pour cash into his company.
“Kwon and his story are a product of our times,” Cho Dong-keun, an economics professor emeritus at Myongji University, told AFP. “He knew how to win the hearts of those who so desperately wanted to make a fortune in one stroke. He also knew how to exploit their anxiety and turn it into massive profits.”
Elite connections
Born in 1991, Kwon attended South Korea’s elite Daewon Foreign Language High School where, according to a book he wrote about his school days, he founded an English-language student paper and competed in various English debating championships. He went on to major in computer science at Stanford University in the US, and reportedly interned at Apple and Microsoft before returning to Asia to start his own business. In 2018, he co-founded Terraform Labs with Daniel Shin — who is linked to South Korea’s elite Samsung family through his uncle — and developed the TerraUSD and Luna currencies. He quickly rose to fame, partly thanks to Shin’s connections, successfully branding himself as a young industry luminary. TerraUSD was marketed as a “stablecoin”, a type of cryptocurrency which is typically pegged to stable assets such as the US dollar to prevent drastic price fluctuations.