Do Kwon is one of the cryptocurrency industry’s richest and most famous crypto influencers – but not always for the right reasons. Among several controversies, the Terraform labs co-founder is perhaps most renowned for being at the helm during one of the crypto scene’s most devastating stablecoin collapses. This article will investigate Do Kwon’s net worth and how he built his empire.
What Is Do Kwon’s Net Worth In 2023?
It is difficult to accurately estimate Do Kwon’s net worth as of 2023, largely due to the crash of his flagship project Terra and the privacy surrounding his finances. That said, most sources suggest Kwon is still a crypto millionaire, with net worth estimates ranging from US $100-150 million.
What Was Do Kwon’s Highest Net Worth?
At its absolute peak, TerraUSD (USDT) and LUNA were two of the most-traded crypto assets in the entire scene. Sitting at the head of a thriving ecosystem, Kwon managed to amass a net worth of over $12 billion USD.
The Luna Foundation Guard was a nonprofit org built to stand alongside Terra’s stablecoin and assist in other blockchain activities. At its peak, the LFG wallet held more than 80,000 BTC, worth approximately $4-5 billion in mid-2022. We also know that Terraform Labs was once worth close to $40 billion, of which Kwon may have held a portion. On top of this, Do Kwon himself confirmed his net worth was in the billions around the same time the price of LUNA hit $100 (March 2022).
Who Is Do Kwon?
Do Kwon is the now-infamous founder of Terraform Labs, a blockchain protocol intended to support a new era of global payments. The network’s flagship product was the stablecoin TerraUSD (UST), which was algorithmically pegged to the US Dollar. This system rose to immense popularity in early 2022, with the price of Terra’s native token, LUNA, eclipsing $100 after being valued at under $1 just six months prior.
Do Kwon’s crypto career was spurred by his background studying at Stanford University. Although he was born and grew up in South Korea, Kwon moved to the United States in order to complete his bachelor’s degree in Computer Science. Before starting Terra in 2018, Kwon demonstrated his entrepreneurial spirit by launching Anyfi, an e-commerce startup, at the age of 22. By his late 20s, Do Kwon was one of the world’s youngest billionaires – before it all came crashing down in 2022.
Do Kwon’s Controversies: The Collapse Of Terra
Terra was sitting comfortably as one of the crypto industry’s most influential and adopted projects of all time. Its native network tokens – LUNA and UST – regularly appeared in the top 10 cryptocurrencies by 24h trading volume. And Kwon, if he so desired, could literally roll around in cash. So where did it all go wrong?
For six months, Terra kept growing and growing. At its absolute peak, there was nearly $20 billion worth of UST circulating in the crypto community. As it turns out, the extreme level of popularity was unsustainable and the algorithm intended to keep UST at a 1:1 ratio with USD could not keep up with such volume.
One such mechanism was the introduction of the Luna Foundation Guard Reserve, intended as a safety net in case significant sums of money were wiped out from the Terra ecosystem. The idea was that the reserve could compensate for instability in the UST:USD peg. The team raised around $3.5 billion – barely one-sixth of UST’s circulating value at the time.
In May 2022, the price of UST dropped below $1 USD. This is not too abnormal for stablecoins, which can sometimes move within ~1% of the underlying asset’s value without de-pegging. The ability to buy a stablecoin at slightly above (or below) its intended price opens lots of opportunities for savvy traders to make a quick buck on high-volume trades. It’s possible that an arbitrage trader identified the slip in UST’s price and tried to take advantage of the weakening algorithm.
Related: What is the safest stablecoin?
Whatever happened, UST never re-gained its peg, and the Terra community quickly panicked. Noticing that UST was sliding well into the 90c range, holders rushed to liquidate their assets – many using a burning mechanism to convert their UST into LUNA. However, this served to exacerbate the situation, as LUNA tokens were created at such a rapid rate they were subject to hyperinflation. All up, in less than a week, both UST and LUNA were completely worthless. Over $40 billion was lost from the Terra ecosystem, a large portion of them active community members and investors.
What Happened To Do Kwon's Net Worth After The Arrest?
Do Kwon was arrested in early 2023 following the mid-22 Terra de-pegging disaster, so his status in the industry as a public figurehead has significantly diminished. While being held by Korean authorities, details surrounding Kwon’s finances are kept quiet, so nobody can know for sure exactly how much money the Terra co-founder still has access to.
The $100 million figure is based on what Kwon may have been able to extract from the Terra ecosystem before it fully collapsed and he was incarcerated. For example, a researcher from Hansung University, Cho Jae-Woo, came across an 18 million USDC transaction from a wallet that many believe is owned by Do Kwon. The USDC was spread among stablecoins and other assets that aren’t controlled by a central entity (like USDC is with Circle), so the new assets cannot be frozen.
Kwon was in jail at the time of the transaction, suggesting an associate is helping manage his remaining finances. The same day, 5,300 BTC (worth ~$120 million) was sent from a Luna Foundation Guard (LFG) wallet. This company is closely tied to Terraform Labs, although there is no evidence that can prove the Bitcoins belonged to Kwon.
Where Is Do Kwon Now?
In the aftermath of Terra’s collapse, Do Kwon went abroad. His destination was unclear, as he moved from Korea to Dubai to Serbia. All the while, South Korea and Interpol had released arrest warrants for Kwon. Eventually, Kwon was seized by authorities in March 2023 and sentenced to four months in prison for falsifying official identity documentation. It’s worth noting this sentence is separate from charges sought upon Kwon by the South Korean and United States governments, where he faces 40+ years imprisonment for cryptocurrency fraud.