Finance & EconomicsConfirmed
Terra/Luna algorithmic stablecoin collapse (Do Kwon, 2022)
TerraUSD (UST) was an algorithmic stablecoin designed by Terraform Labs and its CEO Do Kwon. In May 2022, the UST peg collapsed, triggering a "death spiral" that wiped approximately $40 billion in market value within days. The SEC filed fraud charges in February 2023. Do Kwon was arrested in Montenegro in March 2023 and extradited to the United States in 2025. Evidence at trial showed Kwon and colleagues had privately known the stablecoin mechanism was fragile and had concealed its prior near-collapse in May 2021.
15 sources5% confidencefully sourced