How The Talking Crypto Founder Caused a $40 Billion Crash

Neel Somani, 24, quit her job as a quantitative researcher at the Citadel, a hedge fund, in February to work a project connected Luna’s underlying blockchain with Ethereum, another cryptocurrency system.

In April, Mr. Somani joined Terra Hacker House, a month-long program in the Chicago office funded by Terraform Labs and its investors, designed to incubate projects built on Mr. Kwon’s technology. Within weeks, Mr. Somani had signed $10 million in venture funding commitments, valuing his project, Terranova, at $65 million. He said he was about to hire three employees and have 40 customers excited about the idea.

After the collapse of Luna and TerraUSD, Mr. Somani and his fellow hackers initially thought that Mr. Kwon and his partners could turn the tide. But by last Tuesday, Mr. Somani realized it was over and was relieved he hadn’t received the funding. He lost about $20,000 from Luna, he said, which didn’t bother him because he made money on risky stock and crypto bets.

In the last week, the hacker’s home desks have been empty. A Telegram group called Rebuilding Terra, with almost 200 members, actively discussed how to save projects and funds.

Mr. Somani is optimistic. “For those of us crypto builders, the holiday mentality and hunger came really naturally, and that might be what drew us to the community,” he said.

On Thursday, he plans to showcase his now-outdated technology at hacker showcase day. He said most of the other groups have already left the show, so he’s hoping for less competition for the $50,000 first prize.

“It is in US dollars,” he said. “I asked.”

Kirsten Noyes research contributions.

Sound by Parin Behrooz.

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