Terra creator Do Kwon is apparently a longtime scam artist who also put together the failed algorithmic stablecoin “Basis Cash” (BAC), which was launched through Ethereum in 2020.
Just like the now-failed Terra coin, BAC “sought to maintain a $1 peg through code, not collateral,” according to CoinDesk. BAC ultimately failed, never reaching dollar parity and eventually crashing to “well below 1 cent” where it now trades.
CoinDesk, which is normally pro-crypto, reported in a new piece that the Terra fiasco is just “history repeating” itself.
Former Terraform Labs engineer Hyungsuk Kang confirmed that Basis Cash was a side project put together by some of Terra’s creators, including Kwon. A second anonymous employee confirmed that Kwon is the true identity behind “Rick Sanchez,” one of the anonymous co-founders of Basis Cash.
“Basis Cash wasn’t tested at the moment, and we weren’t even sure” it would work, Kang told CoinDesk. Kwon just “wanted to test it out,” saying it “was a pilot project for doing that.”
A review of Basis Cash Korea chat logs confirms that Kwon did, in fact, refer to himself as “Risk.”
Before shutting down in 2018 due to regulatory concerns, Basis Cash successfully raised $133 million for the scam. It was described at the time as a “Decentralized Stablecoin with an Algorithmic Central Bank.”
Two years later, “Rick” discussed on Telegram attempting to resurrect the failed stablecoin, writing:
“Yo degens, anyone remember what Basis was? It was one of the early ‘DeFi’ algorithmic stablecoins with high ambitions, but it was shut down due to SEC-related risks. Today we’re bringing Basis back from the grave.”
“In the long term, we look forward to seeing Basis Cash be used widely as a base layer primitive such that there is organic demand for the asset in many DeFi and commercial settings,” he added.
The apparent purpose of this resurrection was to once again fleece the sheep, so to speak. And with what has happened once again with Terra, those who knew of Kwon’s secret identity made the tough decision to come forward about it.
Another “stablecoin” with questionable stability is Tether, which late last year we reported is facing a lawsuit over “unlawful and deceptive” practices.
The suit, which was filed in the District Court of Southern New York, accuses Tether of “immoral, unethical, oppressive, and unscrupulous” business practices, one of them is that the company is lying about the crypto being backed 1:1 by the U.S. dollar.
The Tether scam has yet to fully unravel, but if the Terra situation is any indicator of what is about to happen then the entire crypto world is about to take another huge hit.
As for Kwon, another op-ed published by CoinDesk is rightfully calling him the “Elizabeth Holmes of crypto,” which could not be a more accurate descriptor.
“Stable at zero,” joked someone at Zero Hedge about the future of these stablecoins.
“This is just getting started,” wrote another. “Tether unpegged from $1 this morning, too. Down to .94. If Tether goes, the entire crypto market will race to near zero. This is going to get fun!”
Others referred to crypto scams as legal Ponzi schemes. All a person has to do to start his own crypto scam is come up with a marketing plan that pushes it as the new gold rush. Then just shout down anyone who is skeptical of it until the money starts flowing, cash out, rinse, and repeat.
More related news about cryptocurrency scams can be found at BitRaped.com
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