Do Kwon Isn’t That Bad After All?

As the saga with USDC de-pegging and the collapse of the Silicon Valley Bank (SVB) unravels, there is a lot of buzz going on Twitter – and surprisingly, Do Kwon is part of it.

The fugitive founder of the collapsed Terra Luna, who is allegedly hiding in Serbia, has been mentioned in several prominent tweets that focus on the ramifications of the SVB’s collapse and the losses taken as a result of it.

Among them is a tweet by Binance’s CEO CZ where he states that “Banks are a risk to fiat-backed stablecoins”. One of the replies to it emphasizes that “We need crypto-backed stablecoins!” with CZ in turn saying that “Do Kwon actually had the right idea, but just failed miserably on execution.”

The reply prompted a series of quote tweets, both supportive and negative.

Some users said that Do Kwon needs a second chance, for example, Bull. BnB. 

Another user called him “the hero crypto needs, but not the one we deserve right now” as he “this time last year, this man was building a censorship-resistant stablecoin to remove the industry's reliance on tradfi idiocracy” . Yet, we rewarded him by “tearing down everything he built.”

Others were critical of CZ’s statement.

Co-Founder and Chief Strategy Officer Lightspark and Founder of MIT Cryptoeconomics Lab Christian Catalini quoted the tweet, saying “No. Algorithmic stablecoins are all at risk of a death spiral. Let’s not repeat the same mistakes again” while also including a reference to a paper dubbed “On the Economic Design of Stablecoins”, co-authored by him and Alonso de Gortari of Princeton University. 

Others, like freelance journalist Jacob Silverman, were less courteous tweeting that “Do Kwon is a fugitive from South Korean justice accused of perpetuating a $40b fraud!

Terra Luna collapsed in May 2022 and was triggered by the depegging of the ecosystem's stablecoin UST.  It had an enormous negative impact on the crypto market.

The SEC charged Terraform and Do Kwon with fraud on Feb.17, 2023.