Do Kwon's Beautiful, Dark, Twisted Fantasy World

In his latest interview from nowhere, the Terra founder and international fugitive offers “a window into the mind of an unapologetic sociopath."

AccessTimeIconOct 19, 2022 at 3:42 p.m. UTC
Updated Oct 19, 2022 at 7:05 p.m. UTC
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Wednesday saw the release of a lengthy, rigorous interview with Do Kwon, international criminal fugitive and founder of the collapsed Terra/LUNA blockchain scheme. In the face of implacable, detailed questioning by A-list crypto journalist Laura Shin, Kwon put on a master class in slippery evasion, victim blaming and motivated reasoning, and a staggering commitment to simply denying the evidence against him.

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Among the laughably absurd claims that Kwon advances with a straight face in the interview are:

  • That multiple rigorous on-chain analyses showing the illicit movement of funds out of LUNA-linked entities during and after the system collapse are simply false (without any contravening evidence)
  • That bad timing and “the cruelty of the markets” caused the downfall of the UST algorithmic stablecoin, which had no fundamental design flaws
  • That the use of the Magic Internet Money Degenbox to sell large amounts of UST was merely a response to immense demand, not a way to quietly dump on UST and LUNA holders
  • That Terraform Labs' carefully concealed pre-mine of $1.4 billion worth of unbacked SDT stablecoins (a token pegged to International Monetary Fund Special Drawing Rights) from thin air at launch was simply a necessity of scaling the system, and in no way a premeditated, self-enriching fraud
  • That he is not a criminal fugitive because he hasn’t looked at his South Korean arrest warrant and didn’t find the Interpol Red Notice seeking his apprehension when he searched for it on Google; and also because any sovereign nation can respond to an Interpol "red notice" at their discretion, and also because the charges against him in Korea are politically motivated, and also because he’s definitely cooperating with investigators even though he still won’t tell them where he is
  • That the culture of Crypto Twitter is to blame for his own uniquely vicious, condescending behavior both online and in the flesh
  • That “the hardest thing about the current situation” is the emotional burden that Do Kwon himself carries after destroying thousands of people’s lives

That’s barely the start – almost every sentence Kwon speaks during the interview contains some degree of deception, denial or evasion. His mouth is a black hole that crushes the truth into dust. As Radiant Commons founder Josh Cincinnati summed it up, the interview was “a window into the mind of an unapologetic sociopath.”

The interview is also a clinic in another common trait of sociopaths: They can be very convincing.

Kwon remains consistently calm throughout, despite Shin’s very specific, well-sourced and damning questions. His answers have the air of a patient teacher explaining something to a child – even when he’s entirely evading the question, offering a complex obfuscation or simply making a false statement with utter conviction. Kwon’s favorite phrase (now that it’s no longer “I don’t debate the poor”) seems to be “Just to clarify,” followed by a string of words that do not do that.

None of this diminishes Laura Shin’s incredible professionalism, precision and persistence. This is the first journalistic interview with Kwon since the collapse of his Terra ecosystem (one previous interview was conducted by a content outlet in which Kwon's Terraform Labs was an investor, making it more akin to advertising than reporting). And Shin is at her best here, calmly and valiantly trying again and again to get Kwon to acknowledge the contradictions and inconsistencies of his own statements.

But this is a man living in an alternate reality, whose genuinely impressive glibness allows him to easily produce answers that sound good, but mean less than nothing.

That highlights a crucial distinction on which Kwon’s entire arc may hang: that between a person who is clever and a person who is intelligent.

Do Kwon is clever enough to make superficially reasonable sounds with his mouth, words that are apparently convincing even to himself. What Kwon lacks to a staggering degree is intelligence, including the ability to think beyond his own immediate concerns, to see other people’s perspectives, to interrogate his own assumptions or to conceptualize larger stakes.

(I’m well qualified to question Kwon’s intelligence ­– I understood LUNA and UST better than Kwon himself seemed to, detailing the logistics of its collapse two weeks before it happened and accurately predicting it would go to effective zero as the depegging began on May 9. I'm hardly special – a good number of other people also understood these things better than Kwon, or the equally dimwitted "professional" investors who bought his shtick.)

The entire conversation really deserves a line-by-line breakdown, but at least for now I’ll limit myself to one particularly incredible moment. At about the 20 minute mark, Shin very generously gives Kwon a second opportunity to apologize for his failures after her first question to that effect generates a stream of evasive platitudes. Though Kwon does ultimately apologize, he also works in an incredible display of his disdain for his victims.

“I believed in the stability of UST. And I do understand that my statements about how stable and safe UST would be led a lot of traders and holders without the tools to understand the complex economic mechanisms underpinning UST to gain confidence in a system that ultimately failed.” (Emphasis mine).

Gaze, if you dare, upon this Demosthenes of denial, this Balzac of blame shifting. He gets exactly halfway through a sentence about his own culpability before pivoting to insulting the people who made the mistake of believing him. Of course, this is a meaningless defense that only highlights the emptiness of one of Kwon’s favorite rhetorical tactics – protesting that those accusing him of wrongdoing simply don’t understand what he’s doing.

To this very day, Kwon, so clever yet so dumb, doesn’t grasp that there was nothing there to understand, that what he built was always doomed to failure – or, most of all, that there’s nobody to blame but himself.


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David Z. Morris

David Z. Morris was CoinDesk's Chief Insights Columnist. He holds Bitcoin, Ethereum, and small amounts of other crypto assets.