Do Kwon Outed as Co-Founder of Previous Failed Stablecoin Project

Key Takeaways

  • Terra founder Do Kwon has been revealed to be the id behind “Rick Sanchez,” one of many nameless co-founders of Foundation Money.
  • Foundation Money was modeled on Foundation (beforehand Basecoin), a stablecoin venture pressured to close down amid regulatory considerations.
  • If correct, the reporting would point out that UST just isn’t the primary algorithmic stablecoin venture Kwon has been related to.

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In keeping with new reporting from CoinDesk, Terraform Labs CEO Do Kwon was beforehand concerned in stablecoin venture Foundation Money below the pseudonym “Rick Sanchez.” If true, it might imply that UST just isn’t Kwon’s first foray into algorithmic stablecoins.

Kwon Uncovered

In an exposé this morning, CoinDesk doxxed Terraform Labs CEO Do Kwon by revealing him to be the id behind the pseudonym “Rick Sanchez,” one of many nameless co-founders of the failed stablecoin venture, Foundation Money. CoinDesk claimed to have communicated with two former builders with data of the venture who declare to have the ability to verify Kwon’s involvement. The publication additionally stated it had seen chat logs that reveal “Rick’s” id to be Kwon. If the allegations are true, it might imply that UST just isn’t the primary algorithmic stablecoin venture by which Kwon has been concerned.

Foundation Money (BAC) was an early contender within the algorithmic stablecoin discipline, launching on Ethereum in late 2020. Like UST, was supposed to be pegged to the worth of the greenback via code moderately than 1:1 backing by fiat or different collateral. It by no means labored as supposed. Not lengthy after its launch in December 2020, one BAC was price $155; it rapidly plummeted to ranges close to $1, however the value parity by no means locked, and it’s been in decline ever since. Right this moment one BAC trades for $0.007.

CoinDesk cited Hyungsuk Kang, a former engineer at Terraform Labs who claims to have labored alongside Kwon on the venture, going as far as to say that Foundation Money was in reality a facet venture for among the early creators of Terra. He informed the publication that Kwon considered Foundation Money as a “pilot venture” for testing out the idea behind algorithmic stablecoins. The publication additionally claims to have confirmed Kwon’s involvement in Foundation Money with one other developer who labored on the venture however who solely spoke on situation of anonymity.

Foundation Money was impressed by Foundation (previously Basecoin), which had put ahead the concept of an algorithmic stablecoin as early as 2018. Nonetheless, that venture was shut down over regulatory considerations. Below the pseudonym “Rick” and alongside his as-yet-unidentified co-founder “Morty,” Kwon revived the venture in late 2020.

The revelation has come at a second when Kwon’s flagship venture, Terra, is dealing with all however complete collapse. The UST stablecoin depegged over the weekend and has since plummeted; it’s presently buying and selling at $0.56. In the meantime, Terra’s different token, LUNA, which traded for round $85 as just lately as final week, is presently at $2.15.

Such a surprising collapse has not often been seen within the crypto market, and its results have been widespread. Per CoinGecko, the overall cryptocurrency market shrunk by 7.3% during the last 24 hours as traders rush to guard their property, and the fiasco rapidly drew the eye of regulators. Simply yesterday, Treasury Secretary Janet Yellen testified earlier than Congress regarding the want for stablecoin regulation, citing UST’s collapse as proof of the need of oversight.

Disclosure: On the time of writing, the writer of this piece owned BTC, ETH, and several other different cryptocurrencies.

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