Do Kwon: I do not consider myself a fraudster and I believe in the success of Terra 2.0

Terraform Labs chief Do Kwon believes in the success of the Terra 2.0 project and does not consider himself a fraud. He said so in an interview with The Wall Street Journal.

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“I am deeply convinced that we can become stronger than we were. … Many developers are in the process of rebooting their applications on the new network,” said Kwon.

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After the collapse of the LUNA cryptocurrency and the algorithmic stablecoin UST, the Terraform Labs team proposed restarting the network. The new blockchain started operating on May 28. The support announced by leading crypto exchanges, including Binance, Huobi and Kraken.   

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The collapse of the Terra ecosystem had serious consequences for the digital asset market. The devaluation of LUNA and UST inflicted substantial damage on users of Anchor Protocol.

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The incident also affected the liquidity of major players in the industry: the crypto-lending platform Celsius was one of the largest holders of UST, and the hedge fund Three Arrows Capital invested about $200 million in LUNA as part of the February token sale.

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The situation around the project attracted the attention of regulators in South Korea. Terraform Labs’ activities drew the attention of the prosecutor’s office in the Southern District of Seoul.

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In June journalists learned that the U.S. Securities and Exchange Commission also launched an investigation into the people behind the UST stablecoin.

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In a conversation with WSJ, a Terraform Labs spokesperson said that he did not intend to comment on any law enforcement investigations. He called the incoming lawsuits “baseless” and noted that the company intends to defend itself.

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According to Do Kwon, due to the Terra collapse he lost nearly all his wealth. He added that he does not consider himself a fraudster, because he himself was fully confident in the stability of UST.

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“I confidently made bets and confidently backed UST because I believed in its stability and value proposition. I lost bets, but my actions are 100% in line with my words. There is a difference between failure and fraud,” he said.

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In June 2022, investors accused Terraform Labs and Do Kwon personally of making false statements about the stability of UST.

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