Do Kwon, founder and CEO of Terra Labs, broke his silence to talk about what happened with Terra in May 2022. The meeting took place in Singapore, between an office and his home. The interview is composed of 2 parts, in the first part they review Terra and UST, then they continue with the interview and go through the most relevant topics.
The key question throughout the interview was, did fraud take place? Do defends himself by arguing that he was not aware of what could happen. On several occasions he acknowledges that they received so much support and so many people invested in the ecosystem that it was impossible for it to fail. It is very clear that he is aware of his mistakes and takes the blame for what happened. However, he does not believe it was a fraud.
Nor does he believe that Anchor (and by extension, the whole incentive mechanism around UST) was a pyramid scheme, going so far as to say that the community was asking for much higher returns and that 20% was normal given industry standards. Also, Anchor is built after Terra Luna, so the correlation is broken.
What surprised me most was the story of buying millions in Bitcoin and what the capital was going to be used for. The goal was not to try to stop ominous spirals by buying UST, it was to allow the swap between UST and BTC as an alternative to swapping between UST and LUNA. This would have prevented the massive printing of LUNA. They tried to maintain parity in a forced way. They failed because the selling pressure was unsustainable.
He wants to go ahead with the development of Terra Luna 2.0, despite the investigations in South Korea and Singapore. He claims to have a firm commitment to the community and denies that he has made use of reverse derivatives, shorts. It also denies that they have sold AVAX, Avalanche’s cryptocurrency. And according to Do, there are still BTC left in the LFG.
Undoubtedly it was a controversial interview. There were questions that were not asked (or Do refused to answer), but overall Do’s response to the situation was seen as sufficient, for some. Many questions remain to be answered. We will see how they develop over time and keep you posted.