13 ms·

South Korean prosecutors say Do Kwon 'obviously on the run', asks Interpol help

186 points by 0xChain 4y ago

gandalfian 4y ago
Do you think really $43 billion lost? Or rather that was the theoretical peak valuation? It just seems a staggering amount of money to be available for a new startup crypto project. Hmm, wonder if Do Kwon is reading this :)
- hailwren 4y ago
  It's just the peak market cap. Not the amount of $ invested.
- 55555 4y ago
  Money was not lost, it either changed owners or it never actually existed.
  - deleted 4y ago
    [deleted]
- ChicagoBoy11 4y ago
  Your point is obviously correct and a good reality check, but it sparked a curiosity: Why don't we routinely treat financials reported in this way in the same manner? It seems we do take these "peak valuation" projections a bit on face value and compare potentially high-illiquid assets which are priced at that number with straight up cash in ways that (like this example beautifully illustrates) are , if not outright incorrect, probably very misleading in terms of being an accurate representation of reality. Why is that?
  - gandalfian 4y ago
    I guess the simple answer is the largest number makes for a more exciting artical. And how many journalists actually know and understand the details anyway. I do wonder what the actual amount of hard cash that was lost was. I guess five hundred million dollors lost in confusing crypto project in a land far away is not as snappy as $43 billion lost.
pavlov 4y ago
"CEO is wanted by the Interpol" is to web3 as "CEO rings bell at Nasdaq" was to webs 1 and 2.
- Garvi 4y ago
  I understand the point. But why is that?
  - JumpCrisscross 4y ago
    > why is that? The web3/crypto community seems to select for individuals with an almost proud ignorance of the law and state power. The same personality that can make a 21st-century gold bug pitch (e.g. a world on crypto is one without wars, Bitcoin is impossible to ban, or Luna is magically stable et cetera) is one that reacts to an arrest warrant by no showing and tweeting.
    - notch656a 4y ago
      >The web3/crypto community seems to select for individuals with an almost proud ignorance of the law and state power. And the problem with that is what? State power and law failed us.
      - JumpCrisscross 4y ago
        > the problem with that is what? Generally: if you’re trying to fix something, understanding how it works is usually a good start. Specifically: pompous ignorance leads to gross negligence and criminality so stupidly brazen a B-list editor would send it back for being unbelievable. The sort that is rampant in crypto/web3.
        notch656a 4y ago
        >Generally: if you’re trying to fix something, Yes the fix is clear to me. Remove KYC+AML from the banking/monetary system. The expansion of crypto is in part a response to a pompous ignorance of government officials, attempting to impose a search of your papers merely for banking and the government implementing policies so stupid even a B-list editor wouldn't believe it. The government failed so other actors came in, then everyone made a sad face that when the government failed alternatives were found.
cm2187 4y ago
I naively thought that it would take centuries of inflation before seeing ponzi schemes beating the magnitude of Madoff, it only took 10 years.
- arthurcolle 4y ago
  The future is now!
- nullc 4y ago
  81% of the Madoff losses were recovered (not including funds paid for taxes on false gains), not so in the land of "web3", "defi", and "ico". Through innovative meta-scam-blockchain technology they manage to "accidentally" substantially all the monies.
  - ericjang 4y ago
    s/substantially/sublimate ?
    - nullc 4y ago
      I think I intended to say they accidentally the whole money. But substantially gives substantially the same feel.
  - 1-more 4y ago
    I'm trying to square this with the info on the Wikipedia page. Is this just "The Madoff Recovery Initiative reported $14.418 billion in total recoveries and settlement agreementse" divided by "of which $17.3 billion was actually invested by customers?" If so that's even better at north of 83%.
    - Animats 4y ago
      Madoff recovery amounts are based on how much cash the investor put in, not what their statement said their balance was just before the crash. So long-term holders get none of their supposed profits. The longer someone invested with Madoff, the more they lost. The recovery project is only for direct investors with Madoff. Those who bought into "feeder funds" which fed into Madoff's fund don't get anything directly. There's other litigation involving feeder funds, which can recover something from the Madoff recovery and pay it out to their holders. The recovery initiative got back billions of dollars through clawback lawsuits, where they went after people who'd cashed out of Madoff's scheme before the crash. Those people were effectively participants in the scam, and they profited from it, so they don't get away free. If you can track the money, you can un-do a Ponzi. The amount of legal effort is huge, though.
simple-thoughts 4y ago
It’s alleged he transferred vast sums from the terra treasury to his personal wallet. South Korea is a relatively lenient jurisdiction with a high penetration of blockchain products. But if these accusations are true, it is a case of theft rather than failed innovation.
- 55555 4y ago
  At least a quarter million South Koreans lost money. If he is returned to South Korea, he’s going to prison regardless of whether or not he deserves to. That’s how the world works, IMO.
  - somebodythere 4y ago
    I am not sure you can be sent to jail simply for creating something that turns out to be a bad investment. (goes to 0) This is true even in the arguably more regulated stock market. That being said it seems like there is more to his story than buggy code.
    - wmf 4y ago
      The developer of Anchor told Do Kwon that Anchor wasn't safe but Do Kwon overrode him and deployed it anyway. That's getting into fraud territory because he knew it was going to collapse.
      - JumpCrisscross 4y ago
        > getting into fraud territory because he knew it was going to collapse Fraud requires intent in most jurisdictions. This looks more like gross negligence (and possibly embezzlement). In addition to, likely, a host of money transmission law infractions.
    - enumjorge 4y ago
      As the article explains, he’s being accused of financial fraud, not because his crypto coin flopped.
deleted 4y ago
[deleted]
perihelions 4y ago
This tweet aged well. - "none of us were notified of this at all; when i found out about this, the south korean prosecution told me they usually don't notify people of this because they might destroy evidence and/or leave the country beforehand" - "tbh people being treated as potential criminals like this is absolutely outrageous and unacceptable" https://web.archive.org/web/20220622034155/https://twitter.com/unifiedh/status/1538825838279663617 https://web.archive.org/web/20220622034155/https://twitter.c... (To be clear, this is a different Terra person; not Do Kwon).
- deleted 4y ago
  [deleted]
i_like_apis 4y ago
For anyone who might enjoy some YT regarding this, Coffeezilla, who raises awareness about a lot of crypto scams, is covering Luna well: - https://www.youtube.com/watch?v=ZvzwpbFSi44 https://www.youtube.com/watch?v=ZvzwpbFSi44 - https://www.youtube.com/results?search_query=coffeezilla+do+kwon https://www.youtube.com/results?search_query=coffeezilla+do+...
skc 4y ago
I'm confused about this story. Are the South Korean authorities claiming Kwon is no longer in South Korea? He has a young family (with a child less than a year old) as far as I know, where are they?
- mr90210 4y ago
  Singapore as far as I read on an article.
  - challenger-derp 4y ago
    Singapore authorities claim he has left the country [1]. [1] https://www.businesstimes.com.sg/government-economy/police-say-wanted-crypto-developer-do-kwon-is-currently-not-in-singapore https://www.businesstimes.com.sg/government-economy/police-s...
eatonphil 4y ago
Given South Korea's fairly lenient prison sentences [0] (or maybe I'm just biased up by the very long US sentences) and that South Korea has a history of not extraditing to the US [1], I don't understand why he would risk worse leaving the country and trying to evade South Korean authorities. [0] https://msccsp.org/nasc/downloads/HyungkwanPark_supplemental_material_NASC2009.pdf https://msccsp.org/nasc/downloads/HyungkwanPark_supplemental... [1] https://www.nytimes.com/2020/07/06/world/asia/south-korea-child-pornography-extradition.html https://www.nytimes.com/2020/07/06/world/asia/south-korea-ch...
- jahewson 4y ago
  In other words, he lacks good judgment when it comes to risks?
  - anm89 4y ago
    He's not the Korean elite. He screwed over the Korean elite. They will throw the book at him I'd guess.
    - JumpCrisscross 4y ago
      > He screwed over the Korean elite There is zero chance they’re falling for crypto. This is a problem for the gambling masses. To the degree it harms any elite, it’s by introducing political instability in Korea and reducing Singapore’s standing as a stable financial centre.
      - anm89 4y ago
        a) Screwing over a large amount of the Korean population is screwing over the korean elite(because it creates a populist outcry) (I lived in Korea for years. And I can tell you that a way higher percentage of the population is betting on crypto than in western countries b) This appears to be across the socio economic spectrum. If you think there aren't a ton of rich people throwing money into crypto I guess I'll just say I think you are wrong.
      - 4y ago
m3kw9 4y ago
He knows the light charges filed is a lure to come back, and then they level additional(real) charges on him for screwing everyone over
MomoXenosaga 4y ago
Countries have extradition treaties. Hell even when they don't if you're a diplomatic nuisance you'll be thrown on an airplane- which is what happened to a Dutch drug cartel leader in Dubai.
- notch656a 4y ago
  Countries often won't extradite unless their own nation has a similar law though. Perhaps what he did isn't illegal in Singapore.

186 points by 0xChain 4y ago

Do you think really $43 billion lost? Or rather that was the theoretical peak valuation? It just seems a staggering amount of money to be available for a new startup crypto project. Hmm, wonder if Do Kwon is reading this :)

hailwren 4y ago
It's just the peak market cap. Not the amount of $ invested.
55555 4y ago
Money was not lost, it either changed owners or it never actually existed.
- deleted 4y ago
  [deleted]
ChicagoBoy11 4y ago
Your point is obviously correct and a good reality check, but it sparked a curiosity: Why don't we routinely treat financials reported in this way in the same manner? It seems we do take these "peak valuation" projections a bit on face value and compare potentially high-illiquid assets which are priced at that number with straight up cash in ways that (like this example beautifully illustrates) are , if not outright incorrect, probably very misleading in terms of being an accurate representation of reality. Why is that?
- gandalfian 4y ago
  I guess the simple answer is the largest number makes for a more exciting artical. And how many journalists actually know and understand the details anyway. I do wonder what the actual amount of hard cash that was lost was. I guess five hundred million dollors lost in confusing crypto project in a land far away is not as snappy as $43 billion lost.

pavlov 4y ago

"CEO is wanted by the Interpol" is to web3 as "CEO rings bell at Nasdaq" was to webs 1 and 2.

Garvi 4y ago
I understand the point. But why is that?
- JumpCrisscross 4y ago
  > why is that? The web3/crypto community seems to select for individuals with an almost proud ignorance of the law and state power. The same personality that can make a 21st-century gold bug pitch (e.g. a world on crypto is one without wars, Bitcoin is impossible to ban, or Luna is magically stable et cetera) is one that reacts to an arrest warrant by no showing and tweeting.
  - notch656a 4y ago
    >The web3/crypto community seems to select for individuals with an almost proud ignorance of the law and state power. And the problem with that is what? State power and law failed us.
    - JumpCrisscross 4y ago
      > the problem with that is what? Generally: if you’re trying to fix something, understanding how it works is usually a good start. Specifically: pompous ignorance leads to gross negligence and criminality so stupidly brazen a B-list editor would send it back for being unbelievable. The sort that is rampant in crypto/web3.
      - notch656a 4y ago
        >Generally: if you’re trying to fix something, Yes the fix is clear to me. Remove KYC+AML from the banking/monetary system. The expansion of crypto is in part a response to a pompous ignorance of government officials, attempting to impose a search of your papers merely for banking and the government implementing policies so stupid even a B-list editor wouldn't believe it. The government failed so other actors came in, then everyone made a sad face that when the government failed alternatives were found.

cm2187 4y ago

I naively thought that it would take centuries of inflation before seeing ponzi schemes beating the magnitude of Madoff, it only took 10 years.

arthurcolle 4y ago
The future is now!
nullc 4y ago
81% of the Madoff losses were recovered (not including funds paid for taxes on false gains), not so in the land of "web3", "defi", and "ico". Through innovative meta-scam-blockchain technology they manage to "accidentally" substantially all the monies.
- ericjang 4y ago
  s/substantially/sublimate ?
  - nullc 4y ago
    I think I intended to say they accidentally the whole money. But substantially gives substantially the same feel.
- 1-more 4y ago
  I'm trying to square this with the info on the Wikipedia page. Is this just "The Madoff Recovery Initiative reported $14.418 billion in total recoveries and settlement agreementse" divided by "of which $17.3 billion was actually invested by customers?" If so that's even better at north of 83%.
  - Animats 4y ago
    Madoff recovery amounts are based on how much cash the investor put in, not what their statement said their balance was just before the crash. So long-term holders get none of their supposed profits. The longer someone invested with Madoff, the more they lost. The recovery project is only for direct investors with Madoff. Those who bought into "feeder funds" which fed into Madoff's fund don't get anything directly. There's other litigation involving feeder funds, which can recover something from the Madoff recovery and pay it out to their holders. The recovery initiative got back billions of dollars through clawback lawsuits, where they went after people who'd cashed out of Madoff's scheme before the crash. Those people were effectively participants in the scam, and they profited from it, so they don't get away free. If you can track the money, you can un-do a Ponzi. The amount of legal effort is huge, though.

simple-thoughts 4y ago

It’s alleged he transferred vast sums from the terra treasury to his personal wallet. South Korea is a relatively lenient jurisdiction with a high penetration of blockchain products. But if these accusations are true, it is a case of theft rather than failed innovation.

55555 4y ago
At least a quarter million South Koreans lost money. If he is returned to South Korea, he’s going to prison regardless of whether or not he deserves to. That’s how the world works, IMO.
- somebodythere 4y ago
  I am not sure you can be sent to jail simply for creating something that turns out to be a bad investment. (goes to 0) This is true even in the arguably more regulated stock market. That being said it seems like there is more to his story than buggy code.
  - wmf 4y ago
    The developer of Anchor told Do Kwon that Anchor wasn't safe but Do Kwon overrode him and deployed it anyway. That's getting into fraud territory because he knew it was going to collapse.
    - JumpCrisscross 4y ago
      > getting into fraud territory because he knew it was going to collapse Fraud requires intent in most jurisdictions. This looks more like gross negligence (and possibly embezzlement). In addition to, likely, a host of money transmission law infractions.
  - enumjorge 4y ago
    As the article explains, he’s being accused of financial fraud, not because his crypto coin flopped.

deleted 4y ago

[deleted]

perihelions 4y ago

This tweet aged well. - "none of us were notified of this at all; when i found out about this, the south korean prosecution told me they usually don't notify people of this because they might destroy evidence and/or leave the country beforehand" - "tbh people being treated as potential criminals like this is absolutely outrageous and unacceptable" https://web.archive.org/web/20220622034155/https://twitter.com/unifiedh/status/1538825838279663617 https://web.archive.org/web/20220622034155/https://twitter.c... (To be clear, this is a different Terra person; not Do Kwon).

deleted 4y ago
[deleted]

i_like_apis 4y ago

For anyone who might enjoy some YT regarding this, Coffeezilla, who raises awareness about a lot of crypto scams, is covering Luna well: - https://www.youtube.com/watch?v=ZvzwpbFSi44 https://www.youtube.com/watch?v=ZvzwpbFSi44 - https://www.youtube.com/results?search_query=coffeezilla+do+kwon https://www.youtube.com/results?search_query=coffeezilla+do+...

skc 4y ago

I'm confused about this story. Are the South Korean authorities claiming Kwon is no longer in South Korea? He has a young family (with a child less than a year old) as far as I know, where are they?

mr90210 4y ago
Singapore as far as I read on an article.
- challenger-derp 4y ago
  Singapore authorities claim he has left the country [1]. [1] https://www.businesstimes.com.sg/government-economy/police-say-wanted-crypto-developer-do-kwon-is-currently-not-in-singapore https://www.businesstimes.com.sg/government-economy/police-s...

eatonphil 4y ago

Given South Korea's fairly lenient prison sentences [0] (or maybe I'm just biased up by the very long US sentences) and that South Korea has a history of not extraditing to the US [1], I don't understand why he would risk worse leaving the country and trying to evade South Korean authorities. [0] https://msccsp.org/nasc/downloads/HyungkwanPark_supplemental_material_NASC2009.pdf https://msccsp.org/nasc/downloads/HyungkwanPark_supplemental... [1] https://www.nytimes.com/2020/07/06/world/asia/south-korea-child-pornography-extradition.html https://www.nytimes.com/2020/07/06/world/asia/south-korea-ch...

jahewson 4y ago
In other words, he lacks good judgment when it comes to risks?
- anm89 4y ago
  He's not the Korean elite. He screwed over the Korean elite. They will throw the book at him I'd guess.
  - JumpCrisscross 4y ago
    > He screwed over the Korean elite There is zero chance they’re falling for crypto. This is a problem for the gambling masses. To the degree it harms any elite, it’s by introducing political instability in Korea and reducing Singapore’s standing as a stable financial centre.
    - anm89 4y ago
      a) Screwing over a large amount of the Korean population is screwing over the korean elite(because it creates a populist outcry) (I lived in Korea for years. And I can tell you that a way higher percentage of the population is betting on crypto than in western countries b) This appears to be across the socio economic spectrum. If you think there aren't a ton of rich people throwing money into crypto I guess I'll just say I think you are wrong.
    - 4y ago

m3kw9 4y ago

He knows the light charges filed is a lure to come back, and then they level additional(real) charges on him for screwing everyone over

MomoXenosaga 4y ago

Countries have extradition treaties. Hell even when they don't if you're a diplomatic nuisance you'll be thrown on an airplane- which is what happened to a Dutch drug cartel leader in Dubai.

notch656a 4y ago
Countries often won't extradite unless their own nation has a similar law though. Perhaps what he did isn't illegal in Singapore.