Kwon Do-hyung, CEO of Terraform Labs, speaking in an interview with Coinage released on the 15th (local time). (Photo by Coinage YouTube video capture)
[Asia Economy Reporter Jeong Hyunjin] Kwon Do-hyung, CEO of Terraform Labs, the creator of the Korean-style cryptocurrency Luna and Terra, stated that he has never been in contact with Korean investigative authorities and finds it difficult to decide whether to return to Korea. This statement came amid reports that the prosecution, investigating the incident last month, conducted raids on domestic cryptocurrency exchanges and imposed notification measures upon Kwon’s entry into the country.
According to an interview video released on YouTube by cryptocurrency specialized media Coinage and reports from Bloomberg on the 15th (local time), Kwon said in an exclusive interview with Coinage that when asked about his plans to return to Korea, "It is difficult to make a decision because there has been no contact with the investigators," adding, "They (Korean investigative authorities) have not indicted us on anything." Kwon is currently staying in Singapore and appears to have participated in interviews over two days at his office and residence there.
In May, investors who suffered losses from the Luna crash and Terra de-pegging (the stablecoin failing to maintain the $1 value) filed complaints with the prosecution accusing Kwon and co-founder Shin Hyun-sung of fraud and violations of the Act on the Regulation of Conducting Fund-Raising Business without Permission, among other charges. Subsequently, in June, the prosecution secured tax documents supporting suspicions of tax evasion by Kwon from the Seoul Regional Tax Office, and on the 20th of last month, the prosecution raided domestic cryptocurrency exchanges such as Upbit, Bithumb, and Coinone to obtain transaction records of Luna and Terra. It was also reported that the prosecution imposed notification measures on Kwon regarding his entry into Korea during the same month.
The interview was conducted by Jack Guzman, a former anchor of Yahoo Finance and CNBC, who mentioned the previous day that co-founder Shin had been subjected to a raid. Based on this, the interview is presumed to have been filmed around May 21-22. Guzman asked about Kwon’s plans to return, noting that Shin and Terraform Labs employees are banned from leaving Korea due to travel restrictions.
In the interview, Kwon said he plans to cooperate with investigative authorities when the time comes. He added, "What we will do going forward is simply to present the facts we know," and "We will be completely honest and deal with whatever consequences arise." When asked if he might face imprisonment due to this incident, he replied, "Life is long." Bloomberg reported that Kwon said his move to Singapore before the Luna and Terra crash was due to concerns for his family’s safety.
Regarding the Luna and Terra crash, Kwon said, "I never once thought about what might happen to me if we failed," explaining that the Terra ecosystem, valued at $100 billion (approximately 131.2 trillion KRW), and its market success justified his belief. He admitted that his belief now "seems quite irrational," and during the interview, he repeatedly said, "I was wrong." Although he could not quantify his losses, he emphasized "down infinite."
Kwon denied allegations of a multi-level financial scam (Ponzi scheme), pointing out that early investors suffered the most. Investors claim that Terraform Labs promoted Terra deposits with an annual interest rate of 20%, which they argue was a Ponzi scheme. Regarding public comparisons to Elizabeth Holmes of Theranos, widely regarded as a notorious fraud, Kwon rebutted that unlike Theranos, which never had a diagnostic device capable of diagnosing diseases from a few drops of fingertip blood, Terra functioned well until problems arose and had transparency allowing verification of orders, marking a difference.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
