GENIUS Act, Do Kwon, and TerraUSD: A Crypto Saga Unfolds

The GENIUS Act looms over Do Kwon's trial concerning the TerraUSD collapse, potentially reshaping stablecoin regulations and impacting the broader crypto landscape.

GENIUS Act, Do Kwon, and TerraUSD: A Crypto Saga Unfolds

The crypto world is holding its breath as the GENIUS Act and the trial of Do Kwon, co-founder of Terraform Labs, converge. The fate of TerraUSD (UST) and the broader stablecoin market hang in the balance.

The GENIUS Act: A Game Changer for Stablecoins?

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, already passed by the Senate, aims to bring much-needed regulation to the stablecoin market. This could drastically alter the landscape for stablecoins like Tether (USDT) and, perhaps more directly, influence the legal proceedings against Do Kwon related to the TerraUSD collapse. The Act targets payment stablecoins, potentially impacting charges related to TerraUSD and the LUNA token.

If passed by the House and signed into law, the GENIUS Act will require stablecoin issuers to provide monthly, audited reports detailing their reserves. This increased transparency could pose challenges for companies like Tether, whose reserve composition has faced scrutiny. The Act also mandates registration with U.S. regulators, potentially affecting stablecoins based in foreign countries.

Do Kwon's Day in Court: The Trial Looms

Do Kwon, the central figure in the TerraUSD debacle, has pleaded not guilty to criminal fraud charges. The trial, set for February 2026, promises to be a landmark event in the crypto world. The judge overseeing the case has acknowledged the potential impact of the GENIUS Act, suggesting the legislation could alter the trial's trajectory.

Prosecutors allege that Kwon misled investors about the stability and utility of the Terra blockchain and its products. The collapse of TerraUSD in May 2022 triggered a significant downturn in the crypto market, contributing to the downfall of other entities like FTX.

LUNC's Lingering Hopes and Trump's Potential Pardon

Despite the legal turmoil, the Terra Luna Classic (LUNC) community remains active. There's even discussion about reactivating a market module that was disabled during the 2022 crisis. Interestingly, prediction markets like Kalshi and Polymarket are even considering the possibility of a pardon for Kwon by former U.S. President Donald Trump.

Coinbase: A Potential Winner?

While the GENIUS Act might present challenges for some stablecoin issuers, crypto exchange Coinbase (COIN) could emerge as a beneficiary. Wall Street analysts have a Moderate Buy consensus rating on COIN stock, although the average price target suggests potential downside risk.

Final Thoughts: A Crypto Cliffhanger

The intersection of the GENIUS Act and the Do Kwon trial creates a fascinating and uncertain moment for the crypto industry. Will the GENIUS Act bring stability and transparency to the stablecoin market? Will Do Kwon face the full consequences of the TerraUSD collapse? Only time will tell. One thing's for sure: the crypto world will be watching closely. Buckle up, buttercups, it's gonna be a wild ride!