A Conversation with Do Kwon: The Accusation, the Manhunt, and the Terra Founder's Faith and Confession

Original title: "Do Kwon of Terra: 'It Was Never Really About Money or Fame or Success' "

Original author: Laura Shin

Original compilation: Colin, SevenUpDao Haigui Guild 

Since Terra fell in spring After that, everyone started to care about what happened and became interested in Do Kwon.

The case escalated in September when South Korea issued a warrant for his arrest. According to reports, he himself may not be in Singapore anymore, even Interpol may be in the process of finding him now, I thought Do will not talk to the media because of his lawsuit, but he surprised me last week, he Agree to participate in the program.

I am conducting this interview with an open mind, the main intention is to reveal more information, Let legal experts decide these issues. If I think he didn't answer my question, I will keep asking until I have a satisfactory answer.

As he himself said in the interview, transparency and information are important and I hope This interview contributes to the effort to understand what happened to Terra.

Allegations from South Korea

Laura Shin: Terra's UST and Luna may have cost investors as much as $60 billion, South Korea A wanted warrant has been issued for you, even Interpol has issued a wanted warrant for you, why didn't you return to South Korea?

Do Kwon:Let's clear things up, as far as I understand Interpol is not in its A clear statement was made on the website that South Korea only interpreted the notice in his own way. The second point is that I have not lived in Korea since the end of last year, so it is not accurate to say that I am going back to Korea, it should be said that I may travel to Korea.

Laura Shin: Your arrest warrant and charges are based on South Korea's capital market law, how do you view these charges?

Do Kwon: South Korea’s capital market law is a bit like financial regulation. The Korean authority in this area is known as FSC Financial Services.

I think from the perspective of similar committees in the United States, it is the merger of the SEC and the SEC, but it is more responsible for the financial regulatory system design, not enforcement. The South Korean government has directly stated that cryptocurrencies are not securities, and they have a different definition from the United States.

For this reason, I don't think cryptocurrencies fall under its jurisdiction. So I'm a little bit disappointed that they've made this decision, which should be the domain of the legislature, and financial regulators shouldn't be too involved.

Laura Shin: So you think the arrest warrant from them is illegal right?

Do Kwon: I have not seen an exact copy of the arrest warrant, the data I have It's all from the media, so I think there's a lot of conflicting information in it.

The previous position of the South Korean government has been that cryptocurrencies should not be regulated by capital markets, just like they are not securities. The government has previously expressed to us that it encourages the growth of our digital assets, so I find it difficult to believe that these allegations are legitimate and supported by the political system.

Laura Shin: I noticed in August that you said you would actively cooperate with the South Korean government, but when the arrest warrant came out, your attitude changed So you are no longer cooperating?

Do Kwon: No, we are still cooperating with the investigation, for example like the different types of As with clarification of events and supporting documentation, we have been producing exact documentation and we have been cooperating with all documentation requests.

Hideout

Laura Shin: You keep tweeting that you're not running or hiding, but the media thinks You are no longer in Singapore, so where are you?

Do Kwon: I've read all the allegations that I'm on the run and they all think I'm The crash that occurred in May left Singapore. But that's definitely not true.

The main reason I don't want to talk to the media about my location is that when the crash happened in May, I had a lot of personal threats like, Someone broke into my apartment building. Several of them were journalists, and the rest were ordinary people. I feel that they pose a considerable threat to personal safety, and also hinder my privacy and violate my personal interests.

I don't want to reveal where I live just because if the place I live becomes well known then it's almost impossible for me to live there anymore.

Laura Shin: Can you at least answer if you are in Singapore?

Do Kwon: No, I refuse to answer this question. I don't want a whole lot of guesswork about where I live. If I answered the question, you know, I have meetings and I have some partners, which would make my location easy to guess and prevent me from living a normal life.

Korea lied?

Laura Shin: South Korea claims they froze your $67 million in encrypted assets, and you tweet to deny it Having said that, what's your comment on this event?

Do Kwon: First of all, this matter must be false, but I don’t know if they have Is the intent to mislead people or is it just a simple mistake. But in any case, this is not conducive to clarifying the truth. We saw a lot of rumors like Do Kwon is running away, but it is absolutely not true, we paid all the remaining taxes through the legal process and applied for a legal work visa in Singapore. My point is that the freezing of 67 million funds is just one of so many lies that have led to the truth being buried, and it has led people to draw the wrong conclusions as much as the misinformation of the past few months.

Arrogance on Twitter

Laura Shin: When Terra was on the rise, you tweeted a lot of arrogance, you Do you regret your arrogance?

Do Kwon: I really enjoyed interacting with other people on Twitter and sometimes Unobstructed. Looking back now, I should have had stricter standards for myself.

I hide behind anonymous cartoon avatars on Twitter, so I'm more outspoken, but that shouldn't mean people are following me. I am actually a bit introverted in real life, but with the communication with the media and Twitter, my community and I are more open and candid, expressing our thoughts more transparently. My posts on twitter are mostly for entertainment value as it's fun to crack jokes and share posts. I think it's worth keeping them there, to preserve this history and shed some light on Terra's future.

The confession of Taoism

Laura Shin: What would you like to say to many people who lost their life savings and committed suicide because of Terra?

Do Kwon: No matter what design flaws Terra has, it cannot be my answer to these things excuse. It is my responsibility not to let people notice the cruelty of the market in advance.

For users, there is nothing wrong with sending tokens to Terra’s ecosystem. Terra had hundreds of thousands or even millions of users at the time. All this is based on the stability of UST. It's hard for me to put into words how sad I am about the financial and emotional toll that has taken place here.

Laura Shin: I want to ask a question, you said you have to take full responsibility, but I don't seem to hear an apology like "I'm sorry".

Do Kwon: Of course, I'm sorry for these users. But I never meant to do that, we've been using reports or things like that in response to allegations or things like that. I have been a firm believer in the stability of UST before, but users may not understand the economic mechanism that led us to our ultimate failure, which is the responsibility we are trying to take.

Many people suggested that this is a fraud or a Ponzi scheme or accuse us of shorting UST or misappropriating user funds or similar things, I understand their emotions , but we definitely don't think so. I have been a founder in the crypto space, I have been transparent and open for the past five years, and I am proud of the integrity of the path to this day. Instead of trying to create a protocol that ultimately failed and destroyed billions of dollars in value, we tried to defend the values of crypto with Terra.

Laura Shin: How were you and your family financially doing when Terra was on the brink of collapse?

Do Kwon: My family, like my wife, do not own any real estate, like in Owned condominiums in Seoul. We also did not transfer funds from Singapore to the British Virgin Islands. We have established a corporate structure with a holding company in Singapore.

There is no clear accounting standard for how to count cryptocurrencies, and many crypto companies create many companies at the same time and nest each other. We did not transfer any cryptocurrency to the BVI, all I can say is that any tokens generated by Terra originated in the BVI.

Anchor Yield

Laura Shin: Regarding the interest rate of Anchor, reports from South Korea said that the interest rate of Anchor was initially developed by a core The former decided that it was 3.6%, but you changed the interest rate to 20% a week before the product was launched. Why?

Do Kwon: This is not true. The developers who claimed to be Terra core developers on Korean shows were actually just some of our interns. If you browse Github or any open source documentation, we've documented their contributions on it, so it's hard for me to imagine how they dare claim to be a core developer.

As for the rate of return, we need to understand how Anchor is generated. We plan to launch Anchor in early 2021. At that time, you can look at the rate of return of DeFi. Compared with the summer of 2020, it is actually not particularly high. At that time, the rate of return of DeFi could reach three or even four digits. So at the time we thought such a high rate of return was normal. The main value proposition of Anchor is that the rate of return will become less over time, and the same is true for most DeFi protocols. The rate of return is high at the beginning, and quickly forms a high level of liquidity, and then slowly stabilizes. So is our intention.

19 hard fork

Laura Shin: Let’s talk about Terra’s hard fork in 2019, when a line of code changed the The address of TransLink, an investor in Terra after the fork. Things like this should be openly discussed in the community, but it's not done in the Terra community, why?

Do Kwon: I remember there was an open discussion. But we have to remember that when Terra was first launched in 2019, there was no meaningful community like Ethereum. There were very few people at that time, so there was no particularly big discussion.

I don't think there's anything wrong with this handling, it's just a technical issue, TransLink can't access their address, so we helped with the upgrade It's just a small problem with them.

Compensation for UST Holders

Laura Shin: On May 21, you tweeted that people who suffered losses due to UST could receive Compensation for USDT or USDC, starting from small holders first, when will this happen?

Do Kwon: Now LFG is not in a state where it can clearly dispose of assets. Various civil actions against LFG have limited our disposition of assets. I don't know how long this process will last, but I hope it ends soon.

Let me also state that this is not a refund. Only when people buy things from us will there be a real financial system, we become a cryptocurrency provider, people give us money, we give them stablecoins, people probably don't care if it's the right model, I only care about the stability of the coins used. So our decision to exchange Bitcoin for USDT or USDC is just a good-faith gesture, and we want people who have suffered losses to get a little compensation, but it is by no means a refund for the UST we used to have.

My thoughts after failure

Laura Shin: There have been some extreme highs and extreme lows in your young life. Stanford undergrad This is obviously seen as an achievement, but you also become the biggest cryptocurrency star in South Korea, notorious of course. The South Korean government wants to arrest you, what do you think?

Do Kwon: To be honest, I think it will take years to digest.

One thing I want to clarify first is that some digest or anything like that I start on twitter is never about the money, I just love the jokes .

One thing I hope will clarify in the next few years is what happened to Terra is not a scam or a fraud, it's just a huge market fail. At the same time, I still believe in the necessity and feasibility of decentralized algorithmic stablecoins.

A lot of people think I'm an idiot, buying bitcoin right before it's about to crash or something like that. But from the perspective of the founder of an encryption project, as long as everyone has confidence in encryption, the encryption industry will become better. I'm still willing to contribute.

Laura Shin: I'm curious what would you do if you could travel back now?

Do Kwon: Then I will definitely make a lot of changes. For example, I will know that reserves are more important, and I will be less aggressive and less joking.

Twitter is definitely where I will make a big change, I will spend less time on social media and it will help me accomplish more work.

My next attempt is still in the decentralized currency space, but maybe not a stablecoin, maybe not pegged to the dollar, maybe have a different type of reserve . I firmly believe that building a decentralized currency is one of the important problems that cryptocurrencies must get right, it is fundamental to our industry.

I think in terms of recent regulatory crackdowns, censoring transactions and arresting developers from Tornado Cash and things like that, it shows that we need to move towards decentralized future endeavors.

Developers need to learn from what happened here and keep trying to create decentralized currencies. Our experience is not all failures, we have built interesting applications, and our development history is very valuable for others to create decentralized currencies.

I still want to contribute for sure, all cryptocurrencies are highly experimental right now, I plan to keep building, keep working.

Disclaimer: Readers are requested to strictly abide by local laws and regulations. This article does not represent any investment advice.

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