Terra’s Do Kwon says charges against him not legitimate and politically motivated

Do Kwon alleges that charges levelled against him by the South Korean prosecutors are not legitimate and politically motivated, sharing a rare update on what has become one of the most high-profile events in the crypto industry this year in the aftermath of the $40 billion wipeout of his Terra blockchain.

Kwon said he has yet to receive a copy of the Interpol’s red notice and his understanding is that the order doesn’t include an international arrest warrant. He said he is complying with “all the document requests” made by the South Korean prosecutors.

“Every sovereign nation can interpret the red notice the way it sees fit,” he told journalist Laura Shin on her podcast Unchained. He said he plans to address, appeal and do everything to get to a “better result.”

Interpol issued a red notice for Kwon last month after South Korean prosecutors made the request to the organisation that facilitates international police information exchange and arrest requests. Earlier this month, South Korea ordered Kwon to surrender his passport, or risk getting it revoked.

“The second point of clarification is that since the end of last year, I haven’t been living in South Korea. So it wouldn’t be accurate to say [the order is about me] returning to South Korea. The more accurate point would be would I travel to South Korea,” he said.

Media reports have claimed that Kwon has been on the run and has left Singapore. Kwon disputed many of the findings in media reports, but declined to disclose where he is currently residing, citing personal security and privacy concerns.

Kwon also expressed disappointment at the overreach of South Korea’s Financial Services Commission, which he said is tasked with devising regulation policy but is increasingly venturing into enforcements. He said the Korean government as well as the FSC don’t classify cryptocurrencies as securities. “So it’s not within the ambits of their jurisdiction to regulate cryptocurrency for that reason,” he said.

“We are a little bit disappointed in the way that prosecutors are attempting to create new regulation through criminal enforcement proceedings whereas that really should be within the job description of the legislature or at the very least the financial regulators,” he said, adding that he doesn’t think “any of the charges pertaining to the Capital Markets Act” are “legitimate” and called them “politically motivated.”

The Terra Ecosystem’s stablecoin UST and cryptocurrency LUNA — both of which were intertwined — collapsed in a matter of days in May this year, wiping countless individuals’ personal savings. Kwon said he takes full responsibility for the failure of the blockchain.

“I own up to the responsibility fully. It’s not easy — the hardest thing about the current situation is having to content with so much astronomical loss. It’s quite hard to put into words, but the scale of the financial and emotional and economic damage that happened here is not easy to live,” said Kwon, visibly shaken and remorseful.

As Luna grew and became one of the world’s largest blockchain ecosystems over the years, Kwon earned a reputation for hurling insults at others, often calling the critics of his blockchain poor. He said on the podcast that he should have held himself to a more stringent standard. “Just because there are anonymous cartoon characters that are, shall we say, more liberal with the words they are using, does not mean I should have followed suit.”

In the wide-ranging interview with Shin, in which Kwon talked about his past work and weighed in on why his blockchain failed, he reiterated his belief that the world still needs decentralized money.

“I do really think that building decentralized money is one of the most important problems that crypto has to solve. Because with it, what are we even doing here?” he said. “I think in terms of the recent regulatory clampdown on censoring transactions and arresting developers from Tornado Cash, it’s indicative of how we need to work towards that decentralized future.”

He urged developers to learn from his mistakes but keep attempting to create decentralized money that is not just censorship resistant “but more robust, more transparent and resistant to failure.”

Kwon also confirmed that he is not working on Luna Classic, the token underpinning the original Terra blockchain.