I just saw Kwon Do-hyun's apology letter, and honestly, this matter is much more complicated than I initially thought.

This is the first time the founder of Terraform Labs has publicly shared a relatively comprehensive view of his thoughts on the historic collapse of Terra/Luna. Some parts of the letter do carry a tone of self-justification, but at its core, it’s about admitting fault, expressing regret, and facing the losses caused to the community.

What’s most heartbreaking is what Kwon Do-hyun admits—he underestimated the risks of the algorithmic stablecoin model, trusted the system to self-regulate, and completely failed to foresee the chain reactions that would be triggered once trust collapsed. This isn’t a technical detail; it’s a fundamental flaw in understanding the entire mechanism. He directly apologizes to investors, users, and everyone affected, acknowledging that the severity of the situation far exceeds anything he had imagined.

An interesting aspect of the letter is that he’s both admitting fault and explaining the technical background and strategic logic at the time. There is some self-defense involved, but it also shows he’s trying to clarify that this wasn’t intentional fraud—though this point remains controversial within the community.

What’s even more noteworthy is that Kwon describes the mental, legal, and life consequences he faced after the collapse. This is completely opposite to many people’s imagined “safe escape.” Being prosecuted, detained, losing freedom, and facing ongoing legal pressure—this is no longer just a reputation issue.

From a broader perspective, this incident, like the FTX collapse, exposes the core vulnerabilities of the crypto market. Risk management, stablecoin mechanisms, leadership ethics—all have been thoroughly scrutinized. To some extent, it’s precisely these painful lessons that have made the market more mature and cautious, leaving less room for fragile models to hide.

But on the other hand, no matter how many apologies are made, they can’t undo the losses suffered by millions. Kwon Do-hyun’s letter can be seen as a reflection of his current state of mind, but it’s far from the end of the Terra story. The real impact is still ongoing—lessons learned from this collapse continue to shape how the current crypto market operates and self-regulates.

Ultimately, Kwon Do-hyun’s story reminds us of a harsh reality: financial innovation may create the future, but when it fails, the cost is always trust—and that trust is difficult to repair with just an apology.