The red alarm light on Min-jun's monitor pulsed in the dark room.
[ALERT] The DAO has been drained. [ALERT] 3.6 Million ETH stolen. Ethereum Price: $20.00 -> $13.00 (-35%).
"It's happening," Min-jun whispered, rubbing his tired eyes.
The DAO (Decentralized Autonomous Organization) was supposed to be the future of investing—a venture fund run by code, not people. It had raised $150 million. And now, a hacker had found a recursive call bug and was draining the wallet dry.
Panic was sweeping the crypto forums. “Ethereum is dead.” “Vitalik failed.” “Sell everything before it goes to zero.”
Min-jun picked up his phone. He called his broker in Hong Kong.
"Buy," Min-jun ordered.
"Sir? The network is under attack. The price is freefalling. It might hard fork. The chain might split."
"I know," Min-jun said. "There will be two chains. ETH and ETC (Ethereum Classic). The market thinks this is the end. It's actually the beginning of 'Code is Law' versus 'Social Consensus'."
Min-jun looked at his 200,000 ETH position. It had lost $1.4 million in value in an hour. Most people would vomit. Min-jun poured himself a glass of water.
"Use the remaining cash in the offshore account. Buy 50,000 more ETH at $12. The foundation will fork the chain to reverse the hack. The main chain (ETH) will survive. And when it does, the uncertainty vanishes."
He hung up. He was betting on the resilience of the ecosystem. In 2017, that $12 ETH would trade at $1,400. The panic of 2016 was the discount of a lifetime.
July 15, 2016. The Westin Chosun Hotel. Investor Relations (IR) Conference.
The ballroom was packed. Analysts, fund managers, and reporters jostled for position. On stage stood Jin Hyuk-jae, flanked by the CFO of Daegwang Construction.
"The merger between Daegwang Construction and Daegwang C&T is essential for synergy," Hyuk-jae declared, reading from a teleprompter. "It will create a global infrastructure giant. The merger ratio of 1:0.35 is fair and based on market value."
"Objection!"
A voice cut through the scripted presentation. Paul Stone of BlackEdge Capital stood up in the front row. He wasn't holding a question card. He was holding a microphone he had brought himself.
"Mr. Jin," Paul’s voice boomed. "Your 'market value' is manipulated. Daegwang C&T shares have been artificially pumped by 40% in the last month using corporate treasury buybacks, while Construction shares were suppressed by delaying positive earnings reports."
Paul waved a blue folder.
"We have the internal valuation report. The fair ratio is 1:0.6. You are effectively stealing 300 billion won from minority shareholders to subsidize your inheritance tax."
The room erupted. Cameras flashed blindingly. Hyuk-jae froze. He looked at the folder. He recognized the color coding. It was an internal audit file. A leak.
"Security!" Hyuk-jae shouted, pointing at Paul. "Remove this disruptor! He is spreading false rumors to short the stock!"
As security guards rushed Paul Stone, Min-jun sat quietly in the back row, sipping coffee. He watched Hyuk-jae’s face. The sweat on his brow. The twitch of his eye. The seed of doubt was planted.
But Min-jun knew the truth of the Korean market. Logic didn't win votes. Power did.
July 20, 2016. Mirue Partners.
Did you know this story is from Royal Road? Read the official version for free and support the author.
"We have the retail votes," Hong Ye-eun said, analyzing the shareholder registry. "BlackEdge rallied 15% of the minority shareholders. With our 3% (via Nemesis), we have 18%."
"It's not enough," Min-jun said. "Daegwang controls 30% through cross-shareholdings. The foreign investors hold 20%—they will vote with BlackEdge."
"That leaves the Swing Voter," Ye-eun pointed to the elephant in the room.
National Pension Service (NPS). Stake: 11%.
Whichever way the NPS voted, the merger would pass or fail.
"Standard logic says NPS should vote 'NO'," Ye-eun reasoned. "If the merger passes at this unfair ratio, the NPS loses 50 billion won in value. They have a fiduciary duty to the pensioners."
"Fiduciary duty," Min-jun scoffed. "Ye-eun, you are too naive. In this country, duty is to the Blue House."
Min-jun pulled up a news article from 2015. [Samsung Merger Approved by NPS despite Advisory Panel Objection.]
"The government pressured the NPS to support Samsung back then," Min-jun said. "They will do the same for Daegwang. Hyuk-jae has been lobbying the Minister of Health and Welfare. He’s been donating to certain... cultural foundations."
"Cultural foundations?"
"Mir and K-Sports," Min-jun said the names. To anyone else, they were just non-profits. To Min-jun, they were the laundromats for the President's confidante, Choi Soon-sil.
"So we lose?" Ye-eun asked. "If NPS votes YES, the merger passes. Hyuk-jae wins."
"He wins the battle," Min-jun corrected. "But he loses the war."
Min-jun opened his trading app. Instrument: Daegwang Construction. Action: SHORT (via Futures).
"Hyuk-jae thinks the merger is his coronation. But he's buying a poisoned chalice. He is bribing the government to get this deal done. And when that bribery is exposed..."
Min-jun looked at the calendar. October. The Tablet PC.
"We let the merger pass," Min-jun decided. "We let the NPS betray the public. We document everything. And then, we hand the evidence to the prosecutors when the regime falls."
July 25, 2016. The Vote.
The Shareholders Meeting was a riot. Screaming, shoving, physical barricades. But the result was mathematical.
NPS Vote: FOR. Merger Approved.
Jin Hyuk-jae appeared on the steps of the convention center, victorious. He raised his arms like a gladiator. Daegwang Construction stock rallied 5% on the "Removal of Uncertainty."
Min-jun watched from his office. He was down on his equity position. But he was loading up on his short position.
"Celebrate, Hyuk-jae," Min-jun whispered. "You just signed your arrest warrant."
October 24, 2016. 7:55 PM. The Mapo Apartment.
Min-jun sat with his father and grandfather. They were eating cut fruits. The TV was tuned to JTBC Newsroom. Anchor Sohn Suk-hee appeared on screen. He looked serious. More serious than usual.
"Tonight," Sohn began. "We have a report that will shake the foundation of this republic."
Min-jun put down his fork. Here it is.
[EXCLUSIVE] Choi Soon-sil's Tablet PC Found. Evidence of Presidential Speeches edited by a civilian. Evidence of donations forced from Chaebols.
The screen showed files. Dates. Names. And there, in a leaked memo regarding "Corporate Contributions": Daegwang Group: 5 Billion Won -> Mir Foundation. Note: Request support for Construction Merger.
"What is this?" Dong-wook asked, confused. "The President... sent secret files to a shaman's daughter?"
"It's corruption, Dad," Min-jun said, standing up. "It's the end of the world as we know it."
Grandpa Byung-ho stared at the screen, his mouth open. He had voted for Park. He believed in the system. "This... this can't be true."
"It is true," Min-jun said.
He walked to his room. He called Ye-eun.
"Did you see it?" Ye-eun sounded breathless. "The Tablet PC. It mentions Daegwang."
"It mentions everyone," Min-jun said. "Samsung, Lotte, SK. But Daegwang is on the list. The Quid Pro Quo is undeniable. They paid the bribe; they got the merger."
"The people are going to go mad," Ye-eun said. "There will be protests."
"Not just protests. Revolution."
Min-jun looked at his monitors. KOSPI Futures (Night Market): -2%. The market was panicking. Political instability was the worst kind of risk.
"Ye-eun," Min-jun commanded. "Get ready to buy."
"Buy? The market is crashing!"
"Not stocks," Min-jun said. "We are going to buy Influence."
"What?"
"The Candlelight Protests will start this weekend. Gwanghwamun will be packed with millions of angry voters. I want Hermes to deploy."
"Deploy what?"
"Water. Heat packs. Blankets. Free of charge. Branded with 'Hermes Supports Justice'. We align our brand with the revolution. We become the 'Patriot Company'."
"That's... extremely political, Min-jun. If the President survives, we are dead."
"She won't survive," Min-jun said coldly. "The candle burns the brightest before it goes out. She is done."
He hung up. He looked at the chart of Daegwang Construction. Tomorrow, it would crash as the merger's legitimacy was questioned. His short position would print millions.
But more importantly, the shield protecting Jin Hyuk-jae—the Blue House—was dissolving. The Shadow Sovereign was about to step into the light of a million candles.
[TRANSACTION LOG]
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Date: July 2016
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Asset: Ethereum (ETH)
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Action: BUY THE DIP (DAO Hack)
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Price: ~$12.00
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Quantity: +50,000 ETH
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Total Holdings: 250,000 ETH.