South Korean investigators 'haven’t reached out' about Terra collapse, says Do Kwon

Quick Take

  • Do Kwon has said South Korean investigators looking into the collapse of Terra have not reached out to him.
  • He says he “literally didn’t think about even for one second” what would happen if Terra collapsed.

In one of his first interviews since the catastrophic collapse of Terra, Do Kwon, the blockchain's founder, said South Korean investigators looking into the crash have not contacted him.

The comments, made during an hour-long interview in a new NFTV series produced by Coinage, may come as something of a surprise considering the actions of investigators and prosecutors over the last few months.

Authorities have barred Terra developers and former developers from leaving the country, raided crypto exchanges and politicians have called for Kwon to attend a hearing. Kwon is also subject to lawsuits in both South Korea and the US.

Speaking from Singapore, where he is currently in residence, Kwon however said that dealing with due process was not a question of what you are prepared to face but how you are going to face it.

“What we're going to do is we're just going to put out the the facts as we know them. We're going to be totally honest and deal with whatever consequences as they may be,” he told Coinage host Zack Guzmán.

Kwon added that people thinking he had moved to Singapore to evade investigators was a misconception, and that he had been there before the crash. He said that he had dealt with threats against his family in South Korea, which prompted the move.

Whether this makes sense is debatable. In the weeks following the crash, his wife and daughter were still in Seoul, as evidenced by the fact that in May his wife called the police about an intruder.

Kwon further said it was hard to make a decision about returning but that if he wanted to go back it would be regardless of the investigation.

Not so stable

UST, an algorithmic stablecoin pegged to the US dollar and built on the Terra blockchain, depegged dramatically in May. Attempts to restore the peg failed, ultimately wiping out at least $40 billion in value, by some estimates. The knock-on effects of the collapse has contributed significantly to the collapse of other crypto companies.

Kwon said he “literally didn’t think about even for one second” what would happen if Terra collapsed, though he admitted that looking back “this seems super irrational.”

“You've got to put yourself in the shoes of a founder and the ecosystem is inching close to $100 billion. If you've had a series of wins and you get to that scale, then like you almost don't think that you could fail,” he said.

He also discussed previous rumors about the possibility of a mole in Terraform Labs that could have profited from short selling.

“But if those opportunities existed, then the blame is on the person that presented those vulnerabilities in the first place… I, and I alone, am responsible for any weaknesses that could have been presented for a short seller to start to take profit,” he said.

Kwon resisted comparisons between  Terraforms Labs to Theranos, the notorious blood testing start-up run by Elizabeth Holmes. He said the analogy was inappropriate because the blood testing technology touted by Theranos never worked.

“For Terra stablecoins, it was working beautifully throughout the entire history that it was, and the fact that it was working perfectly was visible in the order books and was present in all the integrations in the open source and transparent matter [of] crypto until it stopped working,” he said.

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