About Do Kwon
Do Kwon, cofounder of Terraform Labs, pleaded not guilty in a Montenegro court in September 2023 to charges of using forged passports from Belgium and Costa Rica, according to Bloomberg News. His defense lawyer proposed releasing him on bail of 400,000 euros, but the prosecutor objected, arguing Kwon and former CFO Han Chang-jun had financial means and no interest in remaining in Montenegro. Kwon had been arrested in Montenegro in March 2023 after South Korea issued an arrest warrant for him in September 2022. The U.S. Securities and Exchange Commission (SEC) charged Terraform Labs and Kwon in February 2023 with defrauding investors, alleging they promoted their crypto by claiming the tokens would increase in value and that Kwon secretly arranged for a third party to purchase massive amounts of TerraUSD (UST) to restore its dollar peg in May 2021, while publicly touting the restoration as a triumph of decentralization.
In interviews following the collapse of the Terra ecosystem, Kwon has characterized the event as a "massive market failure" rather than fraud, stating that he believed in the stability of UST and that his statements led users without the tools to understand the complex economic mechanisms to gain confidence in a system that ultimately failed. He has said he went into a "state of shock" when the collapse began and that he tried to help community members find jobs and funding. Kwon has maintained that the Luna Foundation Guard only held 313 Bitcoin and has denied allegations of being on the run, though he has not disclosed his location. He has stated he plans to continue building in crypto, saying, "I am but 31, and I would still love to contribute."
Source: AI-verified profile updated from Do Kwon's recent appearances.
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Transcript (24 segments)
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Interviewer0:00
I've never played before bro. I've never played before bro. It's gotta walk me through it. I'm gonna embarrass myself.
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Do Kwon0:09
Okay, so the first thing that you need to pick is a race. So you can be Zerg or Terran or Protoss.
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Interviewer0:25
I feel like it makes sense to be Terran.
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Do Kwon0:27
Yeah, so Terran is sort of like an extension of the human race. So there's Marines, those are guys that shoot guns. There's Medics, so standard Army setup. So it'll be easier to process.
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Interviewer0:48
Never by Microsoft. You're running Microsoft on a Mac? No, this is a Windows Surface. Oh really? Yeah, dude, my computer is 2014. I was going to bring it, and I just feel like it wouldn't even be able to handle this, even though this is like a very low production quality game. Right, maybe it would be able to handle it.
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Do Kwon1:10
Starcraft, I will have you know, my friend, is a work of beauty.
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Interviewer1:14
Listen, I don't mean to on StarCraft. I'm just saying the goal of this game is to win again. It's to kill your enemies.
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Do Kwon1:24
Is this like your way of unwinding? Yeah, this is super fun. Also, a lot of the people in my circle play Starcraft, so it's really easy. Okay, so you have a lot of resources at this point and your unit count is full. So the first thing that you want to do is put up a Supply Depot. So you do B S, and these are essentially homes for your unit, so it allows you to build more things. Okay, and then this is a Barracks. So you want to build two because you want to build a decent amount of units. But really, you don't need to do this to get the basics of the game. All you need to produce are Marines. Got it, and they fight for us. Yes.
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Interviewer2:14
This is really like a strategy game. Yes, not exactly first person shooter. No, not at all. It kind of reminds me of that wolf game, first person shooter wolf game that was always on Microsoft computers. Wolfenstein? It's like you're a dude going through... I think it was Wolfenstein. It's like a German... I was never too much into FPS. The only thing that I played was Counter-Strike. Yeah, it's pretty classy. And we've basically won by this point because they don't really have defensive units.
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Do Kwon2:59
And all this basically runs. You watch, right? Some people might play basketball or golf. Right, what does this game teach you really? This game, yeah. Like they say, you learn a lot about yourself in Little League. It teaches fortitude. Little League teaches fortitude, yeah. Little League is where you learn life lessons: you learn how to work together, you learn how to respond from struggle and adversity. Well, I guess Starcraft teaches you to help your allies and kill your enemies. Fair, yeah. The same life lessons you learn in Little League, of course.
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Interviewer3:51
Well, so if you play with other people at your level, it's very brain power intensive. And it's not hard per se, but it takes a lot of your time and a lot of effort while playing the game. So for me, it was one of those ways where it was very easy to deal with stress because the way that I like to think about stress is there's just a lot of thoughts going on in your head. And one of the things that I've always tried to tell myself is you should only care about things that matter and something that you can do about. And usually when you're stressed, it's because you're thinking over and over about things that you really can't do anything about. For example, if you got a bad grade, it doesn't matter and you can't do anything about it. So there are a number of things that you could do to sort of quiet the voices in your head. And so for some people, it's sports. Yeah, you talked about not sleeping for eight days during the crash. But after, when you were trying to disconnect, you said you didn't want to read anything. How much did Starcraft help in that?
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Do Kwon5:05
So I haven't played too too much. I wouldn't say recently I've been stressed per se, because once again, there isn't really that much that I can do to deal with the external pressure that's coming in. So I've just been thinking about what to do and things like that. But it's more like there's a difference between grief and stress. Grief is just an emotion that you need to process, and stress is you trying to strategize about something that cannot be strategized.
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Interviewer5:46
At what point do you know you've won though?
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Do Kwon5:52
When I eliminate all the enemies. But I mean, the computer sucks, so... Your computer? No, the computer you're playing against. Yeah. So you already basically know you've already won. We'll see.
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Interviewer6:16
I feel like if I had more time to train, that would have gone differently. Yeah, I feel the same way. I mean, if you think about it, if this is your way of understanding life, how does this correspond to what happened with Terra? Is there a connection?
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Do Kwon6:36
Well, I mean, I just played and I wish I had more time to prepare. If I had built up my defenses stronger, this probably would have gone differently. Yeah, I don't know if I extractedly large lessons with Starcraft apply to Terra, but as I said, it's more of a de-stressing type mechanism. But I guess it's a direct metaphor that wouldn't very much be destroying. I don't know, it was confusing. I was trying to connect the dots to the metaphor.
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Interviewer7:09
And our Starcraft's not a metaphor. I was trying to figure out that one. Oh no, what I mean is when people first start to fall down the rabbit hole of wanting to be an entrepreneur, it's generally for reasons like wanting to become wealthy or things like that. And then the point is, even after you've sort of hit your introductory goals, your motivations kind of change because the responsibilities that you've taken on compel you to want to be successful for different reasons. And I think the common thread of building a strong community, or something about building a strong community, but I think the best communities sort of arise in crypto as a side effect of something else. And I think that comes from not from how exciting the project is or anything of that sort, but it's really about whether the people that are a part of that community want to spend time trying to make others as successful as possible. I could see that. The goals in mind when you say measuring success, I guess change by default because it gets to be bigger. You've got to worry about the communities you're trying to help out. And I guess if it no longer becomes about you achieving success, it becomes about their goals. You become altruistic, and if it grows so big, you basically are no longer serving your best interests or your success, you're serving the communities. Which when that happens, you need to make sure that the growth of it continues. Maybe you start to do things that you wouldn't otherwise. As far as like... I think... Yeah, I mean, there's very few things that you would do when you're just thinking about personal returns or on another level like shareholder returns. All you need to do is make money, that's the only thing you need to care about. But the types of decisions that you need to make when your goals are a little bit more nuanced, that is... Yeah, so there's a lot more to think about. You know, like when it no longer just becomes growing the Terra ecosystem and it's like okay, you can use UST growing in terms of total value locked and Anchor, you can use all those things as measure of success. But if that becomes your yardstick, then you basically can never stop, I guess. Right, right, yeah. Does that lead you to kind of stretch the truth in areas where it's like, well maybe that didn't happen, but you can't not keep the momentum going?
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Do Kwon10:14
Well, I think a community becomes successful in one of two different ways. So they can either do it by making money, or they can do it by choosing to spend time doing things that they otherwise couldn't see themselves doing. So I think one of the things that I felt the proudest about while working on Terra is having converted a lot of people to work in Web3. There were a lot of people that were just casual investors, just buying coins and things like that in the Terra ecosystem, and then they made the jump to do other things, leave their Web2 jobs.
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Interviewer11:07
But I guess at what point did that shift? Like when did that become the measuring stick versus just growing?
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Do Kwon11:25
That's a good question. It's a slow evolutionary process. I just feel like, you know, like what we said yesterday, it's like all right, you come from school, you use a yardstick like okay, get into a good school. You achieve that. As you grow, the yardsticks become less clear. You don't even know how to measure success. And in crypto, it's very easy because it's like number go up, price go up, everyone's talking about a project, people want to work on the project, build on the project. It's like you have the option to choose how quickly you want to grow. And if the goal no longer becomes just number go up but community gets bigger, then I feel like that would change the way I look at it.
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Interviewer12:20
I mean, I think it's over time. I just realized that I was spending, the way that I was making decisions or doing things was a little bit different than what I saw myself doing when I was in college. So I think it just happened slowly. It would also make me way more stressed, I would think, because it's no longer just my yardstick, it's everyone else who's attached to me's yardstick. Right, well, but once again, I think stress happens when you're trying to strategize about your ideals being not in line with your reality. So even if your goals are to personally make a lot of money, if that number is always trying to make as much as possible, then you're never going to reach that ideal. So I can see that being even more stressful as well. Yeah. On the downside though, when it was collapsing, like we talked about, when you're in that moment and afterwards, it's not just your success and failure. Now it's everyone who quit their Web2 jobs to build in Web3. That weighs heavily. Yeah, yeah. How was it on you?
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Do Kwon13:34
Yeah, so I think, obviously I don't really have a relationship with everyone in the Terra community. I only know a very small subset of people. But I think in terms of people that were building companies or working in companies, we managed to find a soft landing for most of those people, at least those that our team had connections to or could reach. And Web3 is still the future, right? So I think for talent with experience having worked in the Terra ecosystem, which is one of the reasons why other ecosystems setting up funds or going on a hiring spree for a lot of people in the Terra ecosystem was actually something that's valuable, because it helps those people find places to be where they don't have to worry about leaving Web3 in order to be able to feed their families.
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Interviewer14:45
But how does it weigh on you, yourself? Like, I'm starting a company right now. It's nowhere near as large, nowhere near as many people counting on me. Five and eight's one of them. And it's like, that's way smaller in scale, and even I am stressed to the point of you don't sleep as well, you gain weight, your hair falls out. That stress manifested physically. Right, yes. And that's what I'm dealing with, and that's not even a small tiny fraction of what I imagine eight days of no sleep in a burrito over a week does to a man. Are you asking what my weight is? I'm not asking you what your weight is. But how it impacted you?
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Do Kwon15:37
I mean, you just put it too well, right? It's... the amount of loss that emanated from Terra's failure, just the magnitude is incredibly high. So yeah, when it first started to happen and I started to have conversations with community members and builders that had to deal with that loss, I went into a state of shock for a little bit. And then after that, I just tried to get myself to be in a place where I could pick up the phone and try to be as helpful as possible. So for people that needed to get jobs, help them do intros. People that needed to raise funding, call the people that I knew so that they can discuss some sort of acquisition or distress financing. But I guess, reflecting on it, there's a question of that's not something a guy would do if he didn't care at all. You wouldn't make those calls if it's failure versus fraud. You just leave it alone. Which I think shows you care. I'm still trying to figure out, again, with all the allegations out there and just looking for what really happened and what you want to clear up, it seems like there's a fine line between failure and fraud. And you've said that everything you've done matches up with this being a thing you tried and it didn't pan out. But as you look back at things, what's your take on how you define fraud?