Today is the anniversary of Do Kwon’s controversial tweet, which has since gained notoriety among the cryptocurrency community and served as a cautionary tale and meme. While Terra was collapsing, Kwon, its creator, tweeted, “Deploying more capital – steady lads,” on May 9, 2022. Despite UST’s lost peg to the dollar and LUNA’s falling value, the tweet was a desperate attempt to preserve faith in the Terra ecosystem.
Critics had already begun to doubt Terra’s stability in March 2022, with some even placing bets against the price of LUNA. Kwon, though, didn’t appear to care and even mocked his detractors online.
Influential traders and investors openly backed the initiative as Terra’s LUNA cryptocurrency hit fresh all-time highs. A record-breaking $119.2 was reached by Terra’s LUNA token in April 2022, and UST rose to become the third-largest stablecoin.
The happy days, however, didn’t last long. Early in May, UST started to suffer, and evidence of capital flight started to appear. Kwon’s unfortunate post occurred as LUNA’s value started to plummet and UST lost its peg to the dollar for the second time.
The consequences were quick and severe, with LUNA’s price ultimately falling 96% in a single day, causing the Terra blockchain to be shut down and the trading of Terra tokens on significant exchanges to cease.
Despite escalating legal issues, the creator of Terra originally attempted to downplay the seriousness of the problem while maintaining that he was on the run.
Kwon was detained in Montenegro in March, and if he is extradited to South Korea, he may spend more than 40 years in prison.
