ELITE CONNECTIONS
Born in 1991, Kwon attended South Korea’s elite Daewon International Language Excessive College the place, in response to a guide he wrote about his faculty days, he based an English-language scholar paper and competed in numerous English debating championships.
He went on to main in pc science at Stanford College within the US, and reportedly interned at Apple and Microsoft earlier than returning to Asia to begin his personal enterprise.
In 2018, he co-founded Terraform Labs with Daniel Shin – who’s linked to South Korea’s elite Samsung household by his uncle – and developed the TerraUSD and Luna currencies.
He rapidly rose to fame, partly due to Shin’s connections, efficiently branding himself as a younger trade luminary.
TerraUSD was marketed as a “stablecoin”, a sort of cryptocurrency which is usually pegged to steady property such because the US greenback to stop drastic value fluctuations.
In 2019, he was featured in Forbes’ 30 underneath 30 Asia checklist.
Forbes wrote that Kwon’s “price-stable cryptocurrency, or stablecoin, attracted 40 million customers to work with the corporate at launch in January 2018”.
“With the goal of constructing a blockchain-based cost system, Terra has raised US$32 million from crypto-giants similar to Binance,” it mentioned.
“SOUTH KOREAN ELIZABETH HOLMES”
However specialists had lengthy warned Kwon’s mannequin was basically flawed, with some outright calling it a Ponzi scheme.
In contrast to different stablecoins backed by real-world property similar to money or gold, TerraUSD was algorithmic – pegged solely to sister foreign money Luna, utilizing maths and incentive mechanisms to keep up their peg.
“Algorithmic stablecoins like Terra/Luna have been doomed from the very starting,” Christian Catalini, founding father of MIT’s Cryptoeconomics Lab, informed AFP.
“Issues can work for some time, whereas the ecosystem is rising, however are destined to run right into a dying spiral sooner or later.”
A full investigation of Kwon ought to assist make clear what occurred when Terra/Luna collapsed, he mentioned, including this was needed to enhance the crypto trade as a complete.
“We have to ensure that dangerous actors usually are not in a position to make use of the know-how to design scams and perpetuate different types of fraud or monetary crime,” he mentioned.
Kwon’s spectacular rise and precipitous fall at the moment are being in comparison with these of convicted American fraudster Elizabeth Holmes, the disgraced founding father of the medical know-how startup Theranos.
Kwon “is rather like Holmes, one other elite who went to Stanford”, the Korea Financial Day by day newspaper wrote.
Cory Klippsten, CEO of crypto buying and selling app Swan.com, made an analogous parallel on Twitter final 12 months.
Kwon had “main Elizabeth Holmes vibes”, he wrote forward of the collapse. “Creepy ranges of cockiness on show, 99.99 per cent of the time means fraud.”
Kwon slipped out of South Korea earlier than catastrophe struck in Could final 12 months, and has successfully been in hiding ever since — at the same time as he claimed on Twitter that he was not “on the run”.
South Korea ultimately revoked his passport, and requested Interpol to put him on the purple discover checklist.
“A accountable grownup and entrepreneur would have stayed and defined,” Professor Cho at Myongji College mentioned.
“The truth that he tried to keep away from authorities by even utilizing solid passports reveals his character.”
This text was initially revealed by channelnewsasia.com. Learn the unique article right here.
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