Is Do Kwon the Elizabeth Holmes of the cryptocurrency market?

*The article represents the opinion of author David Z Morris posted on Coindesk.

Luna, a digital currency linked to TerraUSD (UST) to create a stablecoin that is not pegged to the USD, is becoming the focus of media attention. As of May 13, 2022, the Luna coin was only worth $0.00018, a decrease of more than 99.9% compared to the previous session.

It should be noted that at its peak, the Luna coin was worth $116, but now it has been rejected by exchanges like Binance because it has become almost worthless.

Obviously, the Luna/Terra ecosystem has collapsed and the possibility of recovery is almost zero because the main driving force of this market comes from greedy speculators, but they have lost faith and founders. Do Kwon will no longer have a lifeline for his child.

Is Do Kwon the Elizabeth Holmes of the cryptocurrency market?  - Photo 1.

In history, there have been many projects or empires that have collapsed like Luna, for example Theranos or Enron. They all carry the title of “super donkey” and it seems that founder Do Kwon also shares some characteristics with these “celebrity”.


It is often said that the pinnacle of deception is the deceiver who deceives himself. Most recently, self-made female billionaire Elizabeth Holmes was valued at $ 4.5 billion by Forbes magazine in 2015, becoming the youngest self-made female billionaire in the world in 2014, compared to Steve Jobs when he founded Theranos to rapid blood test for people. Then in 2021, this “female billionaire” faced a 20-year prison sentence when Theranos turned out to be just a “trick”.

According to Morris, both Holmes and Do Kwon blindly believed in what they were doing even when things turned out to be. Although Luna has become almost worthless, Do Kwon still refuses to admit his mistake and still tries to find capital to pour into the sinking boat, while this hole has been formed since the project. Luna started.

Clearly, Do Kwon is a seller who believes in his product, even if it turns out to be a scam that has left investors reeling with billions of dollars in the air. This will become one of the defense arguments in court when the lawyer tries to prove that Do Kwon did not intentionally deceive investors.

Similarly, “female billionaire” Holmes founded Theranos at the age of 19 when she didn’t have much technical expertise about what she was doing. Even when everything turned out to be a scam, Holmes’ lawyers still argued that she was not trying to deceive investors, that the founder had always believed in what he did.

While Holmes started his career at the age of 19, Do Kwon also started his career in his 20s. Like Theranos, Do Kwon also promises investors a bright future of digital currency, not anchored to stable assets or governed by any banks.

Is Do Kwon the Elizabeth Holmes of the cryptocurrency market?  - Photo 2.

Elizabeth Holmes

In fact, all Do Kwon does is iterate over crypto projects he’s seen fail before, making slight improvements and copying them exactly the same. But in the game of digital money, gamblers are never blinded.

Both Do Kwon and Holmes start from the smallest of tricks. While Kwon ran the coin scams before Luna, Holmes faked blood test results and neither was aware, or so intentional, that they were scamming people as well as themselves. myself.

Once again, founders like Do Kwon had to stand in front of a horse when investors trusted him with tens of billions of dollars to bring the capitalization of Luna to $40 billion and UST to $18 billion. Now, both cryptocurrencies are worthless.

Do not admit mistakes

Psychologists follow the school of Sigmund Freud all believe that we can never control our behavior when decisions are more or less influenced by the original instinct. This is the reason why many seemingly obvious things are obscured and the impulsive, impatient people reject even the most obvious facts.

So while they should have admitted their mistakes, these founders have become more vocal and more aggressive in what psychologists say is a “Reaction Formation”. This behavior will cause scammers to use big claims to cover up threats or accusations about their project.

When WSJ reporter John Carreyou first published evidence of Theranos’ fraud, the Holmes founder reacted angrily and even openly insulted the journalist’s media. Although the evidence was clear, Holmes repeatedly denied and assured that she had done nothing wrong.

Similarly, Do Kwon repeatedly insults deceptive critics, calling them “cockroaches”. In November 2021, Do Kwon called a post about the weakness of the Luna coin “the dumbest thing I’ve ever poisoned this decade”. Then, when two other analysis articles in January 2022 showed the instability of the project, Kwon also bluntly called the experts “stupid”, “asshole”…

Is Do Kwon the Elizabeth Holmes of the cryptocurrency market?  - Photo 3.

Holmes in the trial

It sounds silly, but these overreactions are effective marketing strategies when they attract public attention, and investors misunderstand that it is a normal move when a startup is lost. slander.

Some studies show that anger boosts confidence in arguments. As a result, when criticized, they get angry and think they are still right rather than asking themselves difficult questions and admitting their mistakes.

Taking advantage of celebrities

Both Kwon and Holmes understand one thing: They need big names to back their projects if they want to attract investors. So Holmes took advantage of big names like Henry Kissinger, George Schultz and James Mattis, who were famous but inexperienced in biotechnology. But that’s okay, investors know them and pour money into the Theranos scam.

Similarly, Do Kwon needed big names for Luna and so a series of famous funds like Coinbase Ventures, Pantera Capital or Jump Trading appeared.

According to Morris, these hedge funds are probably not interested in Luna’s potential for success but more in Do Kwon’s marketing story, similar to what Theranos did. Investment funds will still benefit from the initial discount when signing the contract even if the project fails.

Some conspiracy theories even suggest that people like Holmes or Do Kwon are just victims of investment funds, when they are used as a marketing tool to make money and suffer when projects fail.

Regardless, Luna’s breakup was almost certain if no real miracle took place. However, in the future, there will certainly be other scams taking place and the question is when and how many people will lose money.

*Source: Coindesk, The Guardian

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