Pether (15)
The Senate and the House agreed to hold a joint hearing and issued subpoenas to Leonard Chang and Kang Mundo. They also requested related materials from Pether Limited and Saturn Labs.
Senator Phillips immediately submitted a cryptocurrency regulatory bill. It contained harsh new rules for stablecoins.
The bill had not passed yet, but public sentiment was so hostile that exchanges and stablecoin issuers all lowered their heads and promised to submit the requested documentation on their own.
The market under that banner lurched again.
As soon as the United States raised the knife of regulation first, the Korean government also convened an emergency meeting on cryptocurrencies.
The Minister of Economy and Finance came down hard on the exchanges with deliberate force.
Under normal circumstances, investors would have pushed back fiercely. This time, however, things were different.
Exchanges had been running an easy racket for years. In stock trading, most of the fees went to taxes, and the brokerage’s share was small. In cryptocurrency trading, by contrast, every bit of the fee belonged to the exchange.
It was also routine for exchanges to invest directly in crypto startups, grab huge allocations during private sales and pre-sales, then sell after the ICO and rake in enormous profits.
Take BitUp, Korea’s largest exchange and the world’s fourth largest: last year its revenue reached 4.6 trillion won.
What was even more astonishing was that its operating profit came to 4.2 trillion won, an absurd 92 percent margin. Among publicly listed companies, only a handful had ever earned more.
Thanks to that, BitUp had risen into the ranks of a conglomerate on the strength of the exchange alone.
BitUp and Bonthum, among others, hurried to clean out their weak coins before the authorities’ blade came down. In the end, they delisted more than one hundred coins.
Coin issuers facing expulsion protested furiously.
They accused the exchanges of having demanded so-called listing fees all along, demanding coins in exchange for listings, and they dragged the whole affair into a muddy public brawl.
But the biggest victims, as always, were the investors.
Even if a grace period for offloading was granted, who would buy a coin that would be delisted in two weeks?
The coins marked for delisting plunged by 99 percent in price, but the exchanges still washed their hands of the matter.
The cryptocurrency market cap, which had climbed as high as 3.6 trillion dollars, shrank to below 1 trillion.
Related companies collapsed one after another, scammers ran off with the money, and investors lost staggering sums.
Crashes like this had happened before.
During the dot-com bubble, more than 90 percent of companies disappeared. But the companies that survived then went on to swallow the world.
Blockchain was undeniably an enormous technology, and cryptocurrency was the form of money best suited to the digital world.
The problem had been speculation.
The cryptocurrency market had not died; the bubble had simply burst.
Real growth could only begin now.
Syd also intended to keep developing Penny.
Penny would become the reserve currency of the metaverse world, but having a reserve currency did not mean other currencies had no place.
I called Seonwu.
"Can you reach Kang Mundo?"
Kang Mundo was Seonwu’s college classmate. They weren’t especially close, but Seonwu said they’d stayed in touch now and then through other friends.
[No way. I heard he went dark in Singapore too. Looks like he’s ignoring the U.S. congressional subpoena as well. Thinking back, I started investing in coins because I followed his recommendation.]
"And I got in because I followed your recommendation."
If you thought about it for even a second, there had always been serious problems with Saturn and Titan’s algorithm.
From the beginning, they were built on the assumption that demand for the coin would keep rising.
The thing propping up that demand was Mars Protocol, which paid 24 percent annual interest. But that was nothing short of a Ponzi scheme.
For that reason, Saturn and Titan would have collapsed long before the Pether crisis ever erupted.
This time, they just collapsed earlier because of me.
Had I unintentionally taken revenge for the losses I’d suffered in crypto before regression?
[Since we were classmates, a lot of people around me bought Titan. Everyone was happy because they’d bought low and made a fortune, but who would’ve thought 99.99 percent of it would vanish? These days, even that old line about "holding on and you’ll win in the end" has gone completely silent. Still, the gamers are happy.]
"Why?"
[Because graphics card prices dropped a lot thanks to this. With crypto prices rising, miners had been sweeping up every graphics card on the market, so gamers had no choice but to buy them at ridiculous prices.]
"Ah, right."
Until now, graphics cards had left the factory only to be dragged straight into mining farms as slaves, and gamers never even got a chance to look at them.
But once cryptocurrencies crashed and mining no longer made money, mining farms closed one after another, and used graphics cards flooded the market.
[Until just recently, the vendors in Yongsan were hiding graphics cards and pulling that classic line, "How much have you checked so far?" Now they say they’ve got too much stock left on their hands.]
"That’s a relief."
So there were positive effects after all.
[Game companies are in chaos too. Rexon bought Vantcoin at the top and got absolutely wrecked, and Winner Factory is canceling or postponing Remix Dollar, DAO, DeFi, NFTs, and everything else after Remix’s collapse. Companies that had been racing to develop P2E games and introduce NFTs are in a bind as well.]
"What on earth are game companies even doing with NFTs? How is that supposed to help gameplay?"
[They’re just slapping NFTs onto items and character cards and selling them, basically another way to make money. It’s tied to P2E, too. You know how the gaming industry has been pushing hard to get P2E games legalized, right?]
P2E, or Play to Earn, was the kind of game where you made money by playing. Winner Factory’s Dragon Legend 5 was the representative example.
Usually, the currency earned in-game is converted into cryptocurrency, then exchanged back into cash on an exchange.
But there was one enormous contradiction in that arrangement.
"If you want to allow money-making games, shouldn’t you get rid of loot boxes?"
Loot boxes are close to gambling.
And the reason they had not been classified as gambling was that they paid out game items rather than cash-equivalent goods.
Game companies didn’t write bans on real-money trading into their terms for no reason.
If in-game currency could be converted into real money, loot boxes would be unmistakably gambling.
[Korean game companies are in the business of enduring contradictions like that.]
"...."
[Still, thankfully, the crypto crash shut all that talk down. Good for gamers, at least. What are you going to do now?]
I answered as if I didn’t even need to think about it.
"I’m going to rest for a bit."
I needed a vacation.
With the success of the Pether short, Continue Capital once again drew the attention of investors.
Even Empty Pool Research, which was widely regarded as one of the leading activist short-selling hedge funds, only managed to succeed on two or three of every ten shorts.
Continue Capital, by contrast, was different.
Whatever it shorted, it hit a jackpot.
There had never been a firm in history that succeeded at this level through short-selling. At this point, calling it a legend in the hedge fund world would not be an exaggeration.
Continue Capital had now risen to a position where it could move financial markets.
Rumors about the existence of a co-CEO began to spread.
"So there’s a Korean co-CEO?"
"Seems like all that investing wasn’t done by Lockhart alone after all."
"Was he the one who put up the capital?"
"Who planned this operation?"
"He’s got serious talent."
Michael Preston, the head of Shark Management, received the loss report with a hardened face.
He had invested heavily in cryptocurrency-related startups, and he also held part of the fund’s assets in crypto.
But this time, the losses snowballed, and the fund’s money drained away like a receding tide.
Once, Shark Management had been Wall Street’s top private equity fund, and he had enjoyed a reputation for being invincible.
But after the Thomas Motors disaster, the decline had begun, and it had only continued from there. Now it was just one more middling private equity fund.
He sighed and said, "I should have contacted David Lockhart just one day earlier..."
As PN Protocol’s deposits flowed out, we burned the Penny we had posted as collateral and pulled out the corresponding dollars.
The LinkLabs acquisition was completed without incident, and it was folded in as a Snow Crash subsidiary.
While David was running himself ragged and Syd was working hard, what was I doing?
I was lying flat in a hotel room.
I didn’t want to do anything.
I was already doing nothing, but I wanted to do nothing with even greater intensity.
My body was fine, but mentally I was exhausted.
Especially in this case, since it was something that hadn’t even happened in the first round, the stress must have been heavier than I realized.
Back when I was trading stocks and coins, even the slightest drop made my heart pound. Now betting hundreds of billions of dollars had become routine.
What should I do now?
I looked back over everything that had happened since my regression.
Truly, each and every one of those events was so extraordinary it would have been hard to dream them up. It was hard even for me to believe I had done it all.
And yet I had worked that hard.
Come to think of it, ever since I regressed I’d just been running like a madman, as if being chased by something.
Was that why I’d burned out?
While I was lying there, my phone rang.
I checked the name and answered without getting up.
"Hello, Chairman."
Chairman Yoo Jae-ho spoke.
[You sound quite exhausted.]
"That’s an accurate assessment."
[You’ve done well. Fortunately, this has finished Im Chang-sik for good.]
"It really is a good thing."
[When you first said that Representative Im Chang-sik absolutely must not become president, I didn’t fully feel the weight of it. But after watching this primary debate, I understood clearly.]
I thought back to the first round.
As this case showed, after becoming president, Im Chang-sik would spend five years kicking only disastrous own goals and then proceed to run Korea straight into the ground.
It was a real relief he hadn’t become president this time.
That was patriotism!
[On the other hand, Senator Phillips is now on a clear presidential track.]
"That’s a good thing too."
His popularity was soaring.
And then, in that instant, someone suddenly came to mind.
Ah, right. That old man!