Who is Do Kwon? UST chief remains defiant as his stablecoin wobbles

By Raffaele Redi

The Forbes 30 Under 30 leader is trying to defend his creation as the UST price falls

UST Terra Usd blockchain stablecoin tokens in various stacks on black background                                 
UST has de-pegged from its normal value of $1 – Photo: Shutterstock

Terra co-founder and CEO Do Kwon became one of the most well-known whales as the TerraUSD (UST) stablecoin drama unfolded.

The decentralised and algorithmic stablecoin of the Terra blockchain started de-pegging from its normal value of $1, as massive withdrawals from UST reserves started to hit the coin. At the time of writing, the coin was priced at $0.4566, according to CoinMarketCap data.

The 30-year-old South Korean founder of the Singapore-based Terraform Labs PTE (TFL), who has currently invested in more than 20 companies, said in the past few hours that “with the current on-chain spread, peg pressure, and UST burn rate, the supply overhang of UST (i.e. bad debt) should continue to decrease until parity is reached and spreads begin healing”.

His announcement came around 24 hours after a vote from the network behind Terra, Luna Foundation, decided to loan out $1.5bn in bitcoin (BTC) reserve balances to defend the peg, generating turmoil in the crypto market.

Who is Do Kwon?

Before co-founding TFL, Kwon received a Computer Science degree from Stanford University, and was a software engineer at Microsoft and Apple, according to the analytic firm Messari.

As well as Terra, Kwon also founded Anyfi, a wireless mesh network startup that aims to build one of the most sophisticated decentralised applications in real-world use, while in 2019 he was recognised as one of Forbes 30 Under 30 leaders in the Finance and Venture Capital category.

Kwon is behind the algorithmically-governed, seigniorage share-style, stablecoin platform Terra, to which a collection of fiat-pegged tokens and a stabilising crypto asset, Luna, are native.

He is also behind the Anchor project, a decentralised money market built on Terra offering UST, and the Mirror Protocol, a Decentralised Finance (DeFi) protocol built on the Terra blockchain.

Kwon, Terra and the US SEC

According to Forbes, Kwon co-founded Terra to use blockchain technology to develop a more efficient payment system, attracting 40 million users to work with the company at its launch in January 2018.

“To build a blockchain-based payment system, Terra has raised $32m from crypto-giants such as Binance, Arrington XRP and Polychain Capital, as well as assembling an alliance of commerce partners including Korean ticketing giant Ticketmonster and travel service Yanolja,” as Forbes explained.

Kwon attracted attention from the media recently when the US Securities and Exchange Commission (SEC) started an investigation into one of his projects, the Mirror Protocol.

The SEC is investigating whether Terraform Labs, Kwon or others “violated the federal securities laws by not registering the offer or sale of securities, selling security-based- swaps outside of a national security exchange, acting as an unregistered broker or dealer, or engaging in securities transactions by an unregistered investment company”.

Despite Kwon filing a lawsuit in response to the SEC intervention late in 2021, claiming that the SEC failed to protect the confidentiality of the investigation, a 2022 US court order imposed him to comply with the investigative subpoenas.

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