Terra Luna's creator has been extradited, what does this mean for the crypto universe!
If you've been in the world of cryptocurrencies for a while, you probably remember the disaster that was the collapse of the Terra (LUNA) in 2022 and now the big news is that Do Kwon, the guy who created the cryptocurrency and stablecoin UST, was extradited to the United States. Now he will have to answer for several fraud charges.
What does this mean for investors or those thinking about entering the crypto market?
Let's understand how it all started and then collapsed, first for those who don't know, Terra (LUNA) was not just another crypto currency, it was part of a project that had UST, an algorithmic stablecoin, the idea was that UST would always be worth one dollar and LUNA helped to keep this value balanced, but instead of having a dollar or gold backing like Tether (USDT), UST remained stable with the supply and demand system, it looked beautiful on paper, until in May 2022 the project collapsed, the UST lost its value and dragged LUNA along with it, those who had a lot of money invested saw it all evaporate in a matter of days, it is estimated that the loss exceeded 40 billion dollars, yes billions! It was such a big shock that it shook the entire cryptocurrency market.
What happened to Do kwon after the project fell apart?
Do kwon was in the sights of several authorities. He was accused of manipulating the market, deceiving investors and violating securities laws, those that protect people from financial scams. First, South Korea issued an arrest warrant, but he disappeared from the map. he spent time in countries that did not have extradition agreements with the United States or South Korea, but his luck ran out in March 2023 when he was arrested in Montenegro using false documents since then both the Americans and the South Koreans were trying to find a way to try the guy first, in the end the United States got the better of him and now he's going to face justice.
How does this affect the cryptocurrency world? Will regulation become more stringent?
After the collapse of the Terra (LUNA) many authorities began to look at the crypto world with suspicion. Do Kwon's extradition shows that the authorities are not joking around, they want to prevent this type of disaster from happening again, so it is likely that the rules become increasingly strict, especially for stablecoins.
Investors are more cautious, especially those who suffered losses with LUNA. Now, many investors are suspicious of stablecoins that are not backed by something real, such as dollars, gold or other assets.
Now we are all more attentive and studying projects to improve them before putting money into them.
Justice is keeping an eye on the market and Do Kwon's extradition also serves as a message to other cryptocurrency developers "if things go wrong we'll come after you" this creates a safer environment because developers who create projects will think twice before launching something risky or suspicious.
When the news of the extradition came out, the market shook slightly, especially in cryptos linked to the Terra ecosystem, but on the other hand, many people thought it was good to see that justice is taking action. This brings more confidence to the market in the long term if you are investing in crypto or Thinking about starting the lesson here is simple, study the projects well, don't fall for the talk of promises of absurd profits without understanding how things work and remember if it seems too good to be true, it probably is.
The story of Do Kwon and Terra LUNA shows that the world of cryptos is still evolving. We are living in a phase where the rules are being created while the game is happening and despite the ups and downs, the crypto market remains strong with many opportunities for those who is willing to learn and be patient in the end Do kwon's extradition is just another chapter in this journey.
