Crypto Death Spiral: Could Luna Rise Again?

US v. Do Kwon, Part 1

De: Matthew Russell Lee

Narrado por: Virtual Voice

It was a normal U.S. Senate Banking Committee hearing on Tuesday, May 10, 2022. Treasury Secretary Janet Yellen said, "A stablecoin known as TerraUSD experienced a run and declined in value."

That had started late on May 8, when UST ostensibly pegged to the U.S. dollar had fallen lower by a penny, then by thirty cents, then sixty.

"I certainly think there are many risks associated with cryptocurrencies," Yellen replies to a question from Senator Catherine Cortez Masto, Democrat of Nevada, who had said "the crypto currency market is now larger than the subprime mortgage market which triggered the global financial crisis."

Almost no one went to prison for that Predatory Bender. That would not be the case for crypto. Sam Bankman-Fried was sentenced to 25 years in prison; Alex Mashinsky of Celsius pled guilty with a sentencing guideline still higher.

Those atop the 2008 mortgage-backed Predatory Bender not only allowed but exploited the systemic risks of their system. Those in power could relate to them, and protected their getaway. Crypto responded that crisis and now fell into a death spiral contagion. Those in power, even those paid indirectly by the likes of SBF, could not (yet?) relate, and prosecutions followed.

With a new era of crypto regulation and even promotion beginning in 2025, would such prosecutions be the same? Could Luna, or something like it, rise again? This is US v. Do Kwon I.

Arriving in shackles in January 2025 in the U.S. District Court for the Southern District of New York was Terraform Labs' Do Kwon, extradited in from Montenegro, on a nine count indictment. This followed a civil SEC lawsuit against Terraform and Do Kwon in March 2024. This reporter covered that, and with that we begin in Chapter 2...