Do Kwon, the disgraced co-founder of the Terra blockchain, has given his first public interview since his much-hyped stablecoin, UST, blew up, taking some $45 billion in investments and savings down with it. There have been numerous heartbreaking accounts of small-time investors facing financial difficulties and salacious stories about major crypto institutions that bet big on Terra, and lost, in its wake.
Of course, this isn’t the first time Kwon has spoken publicly. He frequently posts on Twitter about his new blockchain, his legacy, his family. But it is the first instance of a longform interview that could offer the full side of his story.
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The interview follows in a long line of media events where besmirched and beclowned figures atone for bad decisions, offer explanations and, on rare occasions, share the type of wisdom only gleaned from being “down bad.” I say it could because Coinage, the new media startup producing the two-part series, so far largely fails to deliver on this promise.
Kwon’s story is bigger than Terra, a (once) multi-billion dollar network that attracted big and small investors to participate in the dream of decentralizing an economy built around a synthetic dollar. Its implosion rocked the crypto industry, contributing to a contagion event that brought down several prominent firms and is still being felt.
It’ll go down in history books as an example of mass delusion, in economics textbooks for its irrational exuberance and likely the crypto legal tradition as a fraud. It also represents some of the confusion about crypto’s future: How can a project with such a clear mission, convincing leader and widespread adoption fail so spectacularly?
The series seems designed to resuscitate Kwon’s sullied image. In a 30-minute interview, filmed over two days, Yahoo Finance alum Zack Guzman asks Kwon questions including, “Are you an Elizabeth Holmes,” did lawyers counsel him against speaking to the press, and is it “fair” to say UST was valueless from the start.
This is not to knock Guzman for asking obvious questions. There’s value in taking a compassionate approach to interviewing even discredited people and in drawing them out. There’s also value in listening to Kwon in a non-adversarial setting. But if you’re looking for information about what happened to Terraform’s massive bitcoin (BTC) treasury or why Kwon pulled money out of the Curve pool, a move that preceded the Terra network’s collapse, you’ll have to keep digging.
The tagline Coinage chose, “Down Infinite,” is a Kwon soundbite. It’s a perfect choice for a show that presents Kwon’s 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 seemingly makes light of the real damage he caused to real people.
Indeed, little in the first episode could be considered new. There are a few interesting facts – Kwon more or less confirmed he was involved in failed algorithmic stablecoin Basis Cash, he denied shorting Terra, he alleges there may have been a “mole” at Terraform Labs and he said he has “never” been in touch with South Korean investigators – but no revelations.
Kwon does assume responsibility for Terra’s failure. He said it was an outcome he never predicted, and that his overconfidence was “super irrational.” The project consumed his life. He named his daughter Luna, and said he’s working to make that a name of which she can be proud.
There are times when he looks directly into the camera, as if to apologize directly to those he’s harmed. It is impossible to know what is going through 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 crypto projects ever go up in flames is not the “type of experience” most people have had.
But it’s hard to say Kwon fully expresses guilt in the first episode, even when he assumes responsibility. He’s asked how he feels about a police raid as part of an investigation into Terra on the home of his former colleague Daniel Shin, with whom he founded the Chai payments network in Korea. Kwon has a “default answer.”
Kwon is not unsympathetic or even wavering. But there are moments when he breaks eye contact, when he seems to be casting about for others to share in the burden. He blames an old version of himself, an “alter ego” who was bombastic and said things he shouldn’t have, who possibly mocked Terra’s detractors as a way to willfully and deliberately mislead investors.
Even so, Terra’s failure seems like an expensive way to learn that “You cannot be emotional about markets, you can't blame people for shorting, you can't call people idiots for longing.”
So far, the series has generated little buzz. The first part garnered a hair over 23,000 views on YouTube. And it seems like only a couple of hundred people were willing to pay the transaction fee to mint its associated non-fungible token (NFT) to get into the Discord.
Much of the public conversation around the series has focused on the fact that Terraform Labs is an investor in Coinage, which inevitably raises questions of journalistic independence. (Coinage is also part of “Web3-focused production hub” Trustless Media, which raised a $3.25 million seed round from investors including Sam Bankman-Fried and Ava Labs.)
Guzman, a Harvard graduate, wrote a Twitter thread where he outlined his journalistic ethics. Though there is a “conflict of interest,” the series is not meant to be objective but a way to explain the technical world of crypto to the public at large.
Guzman, too, was an investor in UST and LUNA, who lost out. He said in the interview that “a family friend” committed suicide after Terra’s collapse. There’s a long and drawn-out debate in crypto media about whether journalists should hold the assets they cover, considering the potential for bias or potential to significantly move these illiquid markets.
Guzman is coming from the point of view that his direct experience will inform the story. But I would ask, where is the rightful anger in this case?
See also: UST's Do Kwon and the Human Cost of Lunatic Hubris | Opinion
In the end, it’s not certain whether this interview helps viewers understand Kwon or conceal him more. It’s certainly not the only piece to turn him into a spectacle or a character, and perhaps Guzman is right in saying, “This isn’t a court of law.” It’s possible the interview merely holds a mirror to the crypto industry, which to its credit and fault seems to readily accept and welcome back former fraudsters.
There’s hope that Kwon’s coming interview with industry legend Cobie will be more informative. There’s also hope that part deux of the Kwon tales brought to you by Coinage will take a markedly different tone. But if this is the pilot for a promised media empire, you might write off the venture as another in a series of Kwon’s tragic mistakes.