The unusual personality of the 9x CEO behind Luna

  Do Kwon, CEO of Terraform Labs, is disliked by many for his willingness to criticize anyone.

On May 12, when Luna and stablecoin UST collapsed, Do Kwon announced that he would "inject" 300 million USD into reserve accounts in the lending platform to save these two cryptocurrencies. When asked by someone where the money came from, he replied: "Obviously from your mother."

The answer caused many reactions in the comments section. However, it was not until the incident that Kwon had such an attitude. This 30-year-old engineer is famous for often "turning on" back, ready to argue with those who criticize him.

“In the past, Do Kwon was like a cult leader,” commented Donghwan Kim, CEO of Blitz Labs, a cryptocurrency consulting firm in Seoul. "But now, he's the most hated man in Korea."

Do Kwon at the Terraform Labs office in Seoul. Photo: Bloomberg
Do Kwon at the Terraform Labs office in Seoul. Photo: Bloomberg

Love-hate boundary

Kwon was born in 1992, grew up in Seoul, then went to the US to study computer science at Stanford University. In 2018, he co-founded Terraform Labs in Singapore with Daniel Shin.

The two launched stablecoin (price-stable digital currency) TerraUSD, or UST, in 2020. Unlike other stablecoins like Tether (USDT) or Binance USD (BUSD) that have collateral, UST is associated with a management token. value project Luna through algorithm. To buy UST, users need Luna and vice versa.

However, this is also the drawback of the model. When Luna was sold off, the UST's one-dollar anchor value was gone.

Despite being judged as unsustainable, investors are still caught up in Luna's vortex. Many are said to have been "fascinated by Kwon's genius".

“Terra has attracted many well-known investors thanks to Kwon’s persuasiveness about DeFi’s philosophy in decentralized finance and its tokens,” said a former Terraform Labs employee. "They found the algorithmic model new and attractive. In fact, stablecoins are not linked to the real economy in any way, just backed by and with Bitcoin, so many people think their way Kwon will be the future of digital currency."

Kwon's supporters say his global marketing strategy and prominent social media personality help him attract attention from retail investors. Even a group of people have formed a support group for Luna on social networks, called Lunatics.

To the skeptics, Kwon didn't hesitate to respond. Last year, when a British economist expressed doubts about the algorithm-driven stablecoin model, the 9x CEO said: "I don't argue with the poor on Twitter, and I'm also sorry that there won't be any any change at this time".

"The Lunatics believed that behaving arrogantly was a way to protect Kwon's wealth, so it became his trademark," Kim commented.

The collapse of Luna and UST since May 9 has taken away the property of many people. Even "sharks" like Changpeng Zhao, founder of cryptocurrency exchange Binance, or billionaire Michael Novogratz of Galaxy Digital investment fund have lost hundreds of millions of dollars because of Luna.

However, the biggest losses are still retail investors. Ji-hye, an office worker and mother of three children under the age of five, said she poured all of her savings into Luna in the hope of making a profit. Even after seeing the attraction from the 20% interest rate, she borrowed more from the bank to buy this digital currency. But in the end, almost all of her assets disappeared, leaving Ji-hye in a state of depression.

On May 20, Korean prosecutors opened an investigation into Terraform Labs after five crypto investors filed criminal complaints, accusing the project of fraud and violations of financial regulations. These people said they had suffered 1.4 billion won (1.1 million USD) in damages and wanted to recover the lost money.

Many experts believe that Kwon's trust is mainly based on Terra's 20% interest rate savings model. "Retail investors are drawn in by high interest rates, and VCs are attracted to Luna's rapid growth," said a former Terraform Labs employee.

Another former Terraform Labs engineer, Kang Hyung-suk, also revealed that the company internally recognized the unsustainability of the project but could not stop Kwon. "The employees all knew the risk involved with the 20% interest rate. They all thought it would be unsustainable because the company didn't have enough capital to support it. But no one dared raise an opinion with Kwon, who usually ignored it. ignore opposing views," Hyung-suk said.

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