Transcript Ep. 401 - How Will the Legal Case Against Do Kwon Play Out in South Korea?

Laura Shin:

Hey, all. I'm sure you've been following the dramatic news about Do Kwon, the recent arrest warrant a South Korean court released, the revelation that he is not in Singapore, which until recently was the place he called home, and finally just before the publication of this episode, Interpol's issuance of a red notice to arrest Do Kwon, which went out to law enforcement worldwide. After the arrest warrant was issued, Kwon published a tweet thread that began, "Dear CT," meaning crypto Twitter, "I will tell you what I am doing and where I am if, one, we are friends, two, we have plans to meet, three, we are involved in a GPS based Web3 game. Otherwise, you have no business knowing my GPS coordinates."

In order to learn more about the charges Kwon is facing and what he himself might be thinking, I invited South Korean crypto lawyer Jongbaek Park, and Zack Guzman, the only person who has interviewed Kwon since the collapse of Terra, about what could happen to the Korean founder. As we disclose right up front, both of these guests have some conflicts of interest. However, it's challenging to find a South Korean crypto lawyer with zero ties to Terra / Luna, and I was satisfied that Jongbaek's financial relationship with Terra ended a while back, and that he had the requisite knowledge to educate my largely western audience. Zack's company has investment from Terraform Labs, but as you'll hear, he was able to give us insight into Do's recent thinking around the kind of charges he faces that I found valuable, and frankly, newsworthy.

After we wrapped, Jongbaek mentioned a nuance that we hadn't discussed during the show. He said that in Korea, this is a criminal case, and prosecutors are asserting that Luna is a security, but that is not coming from the Korean Financial Services Commission, or FSC, which is the equivalent of the US Securities and Exchange Commission. So, there's no precedent for Do's case, which means this could actually create a guide for securities law in Korea. Jongbaek also noted that some observers in Korea are speculating that the FSC gave the prosecutors some references regarding how Terra might fit securities requirements, but he said that is not confirmed. Jongbaek is concerned that if the court convicts Kwon on these criminal charges but it doesn't do a deep securities analysis, it could chill crypto innovation in Korea.

Last note, at the very end of the show as we were wrapping up and as I was asking Jongbaek how people can learn more about him and his work, his audio recording stopped, but I didn't realize it at the time. Since you won't hear his response, you can check out the link in the show notes to learn more about his background. Without further ado, here is my interview with Jongbaek and Zack.

Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I’m your host, Laura Shin, author of The Cryptopians. I started covering crypto seven years ago, and as a senior editor at Forbes, was the first mainstream media reporter to cover cryptocurrency full-time. This is the September 27, 2022 episode of Unchained.

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Today's topic is Terra, Do Kwon, and the legal fallout in Korea. Here to discuss are Zack Guzman, journalist and Coinage host, and Jongbaek Park, partner specializing in blockchain and crypto assets at Bae, Kim, and Lee. Welcome, Zack and Jongbaek.

Zack Guzman:

Thanks for having me.

Jongbaek Park:

Thank you for having me.