Number Go Up: Inside Crypto's Wild Rise and Staggering Fall

by Zeke Faux

THE RUN ON Celsius was part of a crisis that engulfed almost the entire crypto industry in the summer of 2022. It took months to unfold. Watching it was like seeing a house of cards collapse in slow motion. The whole time, I was watching Tether prices to see if a run would start on the stablecoin. The crisis started in May. Token prices had been falling, along with tech stocks and other day-trader favorites. Then a crypto company run by an obnoxious thirty-year-old South Korean named Do Kwon exploded. It wasn’t obvious at the time, but this would bring down a huge portion of the crypto economy. Kwon’s main coin was called TerraUSD. It was a stablecoin like Tether, intended to always trade for one dollar. But Kwon didn’t promise to back his coins with dollars in a bank account. Instead, TerraUSD was backed with a second coin that Kwon made up, called Luna. Since Kwon controlled the supply of Luna, he could simply create as many as needed out of thin air. If you’re having trouble following this, that’s actually a good sign about your investing instincts. Comedian John Oliver later summarized Do Kwon’s nonsensical business plan: “One blorp is always worth one dollar. And the reason I can guarantee that is I’ll sell as many fleezels as it takes to make that happen. Also, I make the fleezels.” The reason people bought into Kwon’s Terra-Luna plan is that TerraUSD coins could be deposited in a special crypto bank called Anchor, also controlled by Kwon, which paid a 20 percent ann...