Hello folks, as usual, this is not financial advice and is for educational and entertainment purposes only. As always, please do your own research and find out what investments might be best for you.
A Rapidly Changing Crypto Korea
So absolutely everything in my newsfeed lately has been about Terra. The speed and scope of the damage has been devastating, taking everyone by surprise how a number 3 TVL blockchain could completely disintegrate in a matter of days. As much anguish and hostilities as there has been in the West, there have been just as much conspiracy around DoKwon in the East, especially in his native South Korea. As I mentioned in previous posts, I have some in-laws living in South Korea, who are also interested in crypto, so I've been regularly tracking what the news has been over there, especially what's been happening as of late with DoKwon.
In South Korea, it has been a pretty crazy time for crypto--back in March, South Korea enacted financial regulations that crypto transfers from exchanges could only be done from KYC'd wallets, which means you effectively were barred from sending anything to non-KYC'd wallets such as Metamask or Terra Station. Yet despite heavy handed regulations, they just had a presidential race where both candidates were very pro-crypto. The newly elected president Yoon Suk-yeol is going as far as to promise delayed Crypto taxation until 2025. With these changes in the backdrop, DoKwon, who had been the darling of the crypto-economy in South Korea, has now been staying away from the public eye--all this as the vitriol against him as grown.
There's been a great deal of DoKwon-related news out of South Korea, but here's a few that caught my eye:
The Terraform Labs office in Korea was closed down days before the UST/Terra crash:
Cause and intent are speculative here, so please take this one with a grain of salt, but incidentally there was an application to dissolve the Terraform Labs main offices in Busan, South Korea on April 30th, and then subsequently both of the Terraform Labs offices in Busan and Seoul were liquidated on May 4th and May 6th respectively. The court documentation below shows that the liquidations themselves were authorized "CEO 권도형" or otherwise known as Kwon Do-Hyung.
Now the speculative part here is why the liquidation of these offices occurred just 3-4 days before UST started. Is this just a really bad coincidence?
Break in into DoKwon's house:
After Terra's collapse DoKwon's wife requested emergency police protection after a disgruntled investor came to DoKwon's home demanding to know of his whereabouts. Although I believe the investigation is ongoing, the social/crypto media influencer known as 챈서스 (Chancers) made a public declaration that he was the suspect, claiming that he had lost more than a million dollars on Luna. Apparently this situation wasn't an isolated incident, as reportedly there are quite a few looking for him:
Chai's complete disconnect from Terra:
If you're unfamiliar with Korea's Chai Card, I've written a couple of post about it before, but in a nutshell the Chaicard is (was) a Terra-based prepaid debit card that was launched late 2020 which directly integrated the Terra ecosystem by converting loaded Korean Won (KRW) into KRT when users loaded their funds, and consequently processing transactions via KRT instead of fiat currency. As I had reported before, direct access to Terra Station wallets was removed from the Chai Card back in September 2021 so that users could only on-ramp fiat onto the card, but apparently the entire partnership itself was dissolved in March 2022:
Apparently Chai's parent company Hash Adventures still had some equity in Luna which obviously took a hit, but as there was little demand for KRT, the company had already taken steps to disconnect itself from Terra and the loss was reported as being non-consequential. Therefore Chai is still around and from what I've gathered it's still a popular product, but it no longer has any terra-baked features such as Chaiscan.
Conclusion and My Own Silver Lining
Back in February I opened up a Korean CoinOne account with hopes to on ramp KRW (Korean Won) to KRT, and then to transfer my KRT to my Terra Station wallet. The only reason why I didn't make this transfer was because of Korea's KYC requirements that they enacted in March. In that 2 week timeframe, had I the discipline to try to KYC my wallet at the time, I most certainly would have on-ramped all my savings in Korea to my Terra Station and probably had put it onto Anchor to make the 20% APY. Now I cannot express how thankful that I am for my own laziness. I'm also thankful that I didn't get my in-laws or relatives money involved either. I did take a significant hit with my UST and Luna, but had I gotten access to Chai earlier or had I been able to move my money onto CoinOne earlier, I think I would have lost that much more. For this, I felt that I dodged a major bullet.
There's been a great talk of reviving Terra onto a newly integrated system, but I for one, will not be taking any more risks with any more algo-stablecoins unless it's been overcollateralized. When DoKwon started buying BTC reserves, essentially all he did was make it an under-collateralized stablecoin. I may be naïve, but I personally don't believe that this was DoKwon trying to rug anyone and I genuinely believe that he of all people wanted desperately for this experiment to work, but this is now the second time where he tried to get an algo-stablecoin to work, and to quote Paulo Coelho, "Everything that happens once can never happen twice. But everything that happens twice will surely happen a third time."
Thanks for reading everyone and I hoped you enjoy reading this. If you want more content like this, be sure to follow me here and on my twitter: https://twitter.com/CryptosWith