Collapsed crypto creator gives first public interview; why doesn’t she convince?

By Daniel Kuhn

Do Kwon, the controversial co-founder of the Terra (LUNA) blockchain, gave his first public interview since the TerraUSD (UST) stablecoin imploded, taking with it an estimated $45 billion from investors. There was no lack of moving accounts of small investors who began to face financial difficulties because they had bet too much on the Terra project and lost everything.

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This isn’t the first time Kwon has spoken publicly. He often talks on Twitter about his new blockchain. But only now has he given his first longer interview, in which he tells in more detail what happened.

Entitled “Down Infinite”, the series shows a timeline where controversial figures try to explain their actions and even explain themselves, on rare occasions, saying that they “learned from failure”. The interview, however, doesn’t show all sides of the story, given that Coinage, the media startup that produces the two-part series, has so far failed to deliver on its promises.

Kwon’s story is bigger than that of the Terra blockchain, a multi-billion-dollar network that attracted investors large and small to participate in the dream of decentralizing an economy built around a synthetic dollar.

Its implosion shook the cryptocurrency industry, contributing to a contagion event that brought down several large companies in the sector, and which is still being felt in the market.

The case will go down in the history books as an example of mass delusion, in the economics books for its sheer irrationality, and likely by crypto enthusiasts as a fraud.

Furthermore, it represents part of the confusion about the future of cryptocurrencies: how can a project with such a clear mission, compelling leader, and widespread adoption fail so wildly?

Read more:
• The collapse of Terra (LUNA) and UST cryptocurrencies in 5 charts

The series appears to be made to resurrect Kwon’s image. In a 30-minute interview filmed over two days, former Yahoo Finance Zack Guzman asks Kwon questions, including: “Are you an Elizabeth Holmes?”; “Did the lawyers advise you not to speak to the press?” and “is it fair to say that the UST was worthless from the start?”.

This isn’t a criticism of Guzman for asking obvious questions, as it’s important not to be too harsh in interviews like this one and slowly build the conversation up. Furthermore, it has its value to hear Kwon in an environment favorable to him.

But, if you’re looking for information about what happened to Terraform’s massive Bitcoin (BTC) hoard or why Kwon cashed out the Curve project just before the Terra network collapsed, you’ll have to look elsewhere.

Kwon’s side

Coinage’s chosen slogan, “Down Infinite”, is a catchphrase by Kwon. It’s a perfect choice for a show that presents his point of view uncritically. Not only is this Kwon’s story in his own words, but also literally the voice of the publication.

It’s also a joke Kwon has told before – and one that apparently makes light of the real harm he’s done to real people.

The truth is, there’s little new in the first episode, other than some interesting facts, like the fact that Kwon more or less confirmed that he was involved in the algorithmic stablecoin Basis Cash. Furthermore, he has denied selling Terra and alleges that there may have been a “traitor” at Terraform Labs.

He also said he had “never” been in contact with South Korean investigators – but without any major revelations.

Kwon takes responsibility for Earth’s failure. According to him, it was an outcome he never anticipated and that his overconfidence was “super irrational”. The project consumed his life. He named his own daughter Luna, the cryptocurrency he evaporated, and said he is working to make it a name she can be proud of.

There are moments when he looks straight into the camera, as if apologizing directly to whoever he hit. It’s impossible to know what’s going on in Kwon’s head.

As he said, watching a project that made him a billionaire, that put him on magazine covers, that was one of the fastest-growing cryptocurrency projects in history, go up in flames, is not the “kind of experience” most people have. people would like to have.

But it’s hard to say that Kwon fully takes his blame in the first episode, even when he admits some responsibility. He is asked how he feels about the sting operation as part of an investigation into Project Terra at the home of his former colleague Daniel Shin, with whom he founded the Chai payments network in Korea. On this, he gives only a “standard answer”.

Read too:
• What is the next Earth (LUNA)? How to Escape a Cryptocurrency Crash, According to Expert

Kwon is not unsympathetic and does not hesitate to answer questions. But there are times when he avoids eye contact, seeming to be looking for others to share with him the blame for what happened.

At times, he even blames an old version of himself, an “alter ego” who caught everyone’s attention by saying things he shouldn’t, making fun of those who spoke ill of Terra and accused the project of deliberately deceiving investors.

According to him, the failure of the company he created was a difficult way to learn that “you can’t get emotional about the markets, you can’t blame people for being short, you can’t call people idiots for no reason,” he said.

little publicity

So far, the series has generated little buzz. The first part garnered just over 23,000 views on YouTube. And it appears that only a few hundred people were willing to issue a non-fungible token (NFT) to access via Discord – the process, after all, requires paying fees.

Much of the commentary surrounding the series has focused on the fact that Terraform Labs is an investor in Coinage, which raises questions of journalistic independence. The coin is also part of the Trustless Media “Web 3.0 production hub”, which raised an initial investment round of $3.25 million from investors including Sam Bankman-Fried of FTX and Ava Labs.

Guzman, a Harvard graduate, posted on Twitter highlighting his journalistic ethics. According to him, although there is a “conflict of interest”, the series is not intended to be objective, but a way of explaining the technical part of cryptocurrencies to the general public.

Guzman was also an investor in UST and LUNA, losing money as the project collapsed. He said in the interview that “a family friend” committed suicide after Terra went bankrupt.

There is a long and protracted debate in the cryptocurrency media about whether journalists should keep the assets they cover in their wallets, given the potential to influence the markets.

Guzman is starting from the point of view that his direct experience is able to contain this story. But I would ask, is he really angry at Do Kwon like most of the project’s investors?

In the end, it’s unclear whether the interview helps viewers understand Kwon or makes him an even more confused figure. Guzman is right to say, “This is not a court of law.”

It is possible that the interview is just a reflection of the cryptocurrency industry, which to its credit and fault seems to readily take back its former fraudsters.

On the other hand, there is hope that Kwon’s next interview will be more informative – he will speak with Cobie, a very famous figure among enthusiasts.

Everyone also hopes that part two of this interview will at least have a different tone, but if this is the pilot of a supposed “new media empire”, we are facing yet another case of tragic mistakes by Kwon.

*Daniel Kuhn is a reporter and assistant opinion editor for CoinDesk’s “Layer 2” column.

How far will cryptocurrencies go? What’s the best way to buy them? We have prepared a free class with step by step. Click here to watch and receive InfoMoney’s cryptocurrency newsletter

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