Reply to HaeKwan Lee


This is in response to HaeKwan Lee’s arguments.

I cannot understand how these arguments by HaeKwan Lee are even being raised. Though the points he claims are going around and attempting to diminish the value of BOScoin, I stayed silent because I thought it unworthy and awkward to respond/reply with an explanation to rumors. Thus, I want to thank you for providing me the opportunity to officially respond. I will summarize the points raised and answer them one by one.

Accusation 1. Currently, BlockchainOS is in danger of being ousted from the Foundation. Contract with BlockChainOS (inc.) can be destroyed, all the results taken, and another development team appointed.

This argument is groundless. Although there is friction with the foundation, the foundation’s basis of existence is to protect investors’ funds and support the development of BlockchainOS. Yes, there is a dispute with the Foundation, but there clearly is a produced result and the Foundation damaging or discontinuing a development project that is in full swing would be a breach in itself. Rather, on the subject of pointing out groundless gossip, we recently heard a strange rumor that Mr.Park will be taking hold of the Foundation. We do not understand where these scaremongering rumors are coming from.

Accusation 2. The Swiss authorities will punish if produced outcomes are not delivered due to the contract that depicts the development and delivery of the software funded by the Foundation.

We are unsure which basis this argument lies on that the output has not been delivered. We have officially opened the Mainnet and implemented the < 1 vote per 1 person> governance as the first in the world.

Accusation 3. Yezune Choi’s claim to breach of duty if he transfers Intellectual Property to the Foundation is not true.

It is legally confirmed that BlockchainOS would be at a breach of duty if it abided to the request from the Foundation, and the other shareholders have strongly protested against even the discussion about it itself. It has been clearly expressed that it is a breach of duty if recklessly proceeded. Well, of course. CEO Choi’s request to the two board members of the foundation was not that he couldn’t handover the intellectual property but to find a way to resolve the issue logically since there is a legal breach of duty issue.

Accusation 4. It is extortion for Yezune Choi to register the ‘BOScoin’ trademark under his name. If he does not return it to the company or Foundation by next year, I will raise it as an issue as a shareholder.

There is somewhat a controversy to CEO Yezune Choi holding the trademark. Please understand that this is an executive decision of desperate measures to protect the project. However, it should be noted that that CEO Yezune Choi has never received a single cent for this trademark. It is a fully understandable statement to request the trademark back to the company but it is questionable as to if you are truly speaking from a shareholder’s point of view. If you were, shouldn’t you request it to be returned to the company first then to the Foundation to receive some payment? Just saying, in the perspective of a shareholder. The trademark is scheduled to soon be transferred to the company. However, as the Korean community members have reported most recently, Mr. Park has registered the trademark to himself on June 26th, 2017.

Accusation 5. In October of 2017, 80,000,000 BOScoins from the Foundation were stolen with false documents, shared, and sold at a price higher than 1,000 won.

The accusation that thousands forcefully taken is completely false. This was the allocation of 8% to Foundation and 8% to Members that was already published in the official White Paper 1.0. The claim that it was sold at higher than 1,000 won to the market place is also completely false. I will explain more later.

Accusation 6. Yezune Choi, who was in a bad financial situation, is exercising his power by buying about 1.5 billion won of stocks from Choi Yong-kwan, 800 million won of Miracle Lab shares and 400 million won of shares from Torres. If the sale was carried out beyond the limits of the executive holding limit set by the shareholders’ meeting, it would be a case of embezzlement, and I will bring this issue up as well.

January of 2018, attacks on corporate management initiated full-scale, and on Jan. 23rd of 2018, Mr. Park led a sort of coup d’état situation where he attempted to change the Board of Directors of the Swiss Foundation without the consent of BlockchainOS. It shook the company and Foundation to its bare bones. This is when Yezune Choi couldn’t watch aside any longer and started to take action to acquire stocks even by taking on personal debt. He even took loans from the company. The reason he had to acquire stocks even through loans was because Mr. Park was continuously and forcefully requesting stock holders to sell. It was very obvious that the company would be in a state of internal strife again once the shares were taken by Mr.Park, that CEO Yezune Choi took the responsibility. In this process, Yezune Choi’s personal BOScoin assets were disposed. It was dispersed partially to an individual and used for stock, partial was calculated in fiat value to acquire the company stock. Both were handed over to a certain individual and not sold recklessly in the market like hot cakes. Also, the fiat transformed amount was met at a price much less than 1,000 won. Through this process, Yezune Choi increased his shares from about 15 to 48 percent and stabilized the company’s managerial control. If we had not stabilized the managerial control as such, the company would have been subjected to constant attacks and many valuable employees would have left in such an unstable situation. This would put the project in a very vulnerable situation where it might have been abandoned. Because every possible mean utilized to stabilize management, the company stayed afloat and produced an outcome of the Mainnet.

Accusation 7. Financial statement shows that the company has accumulated a loss of 600 million won from a company with a 100 million capital. In addition, there is a debt of 2.8 billion won debt without any evidential documents. As a shareholder, it is very upsetting.

I don’t think I need to comment any further than to say that CEO Yezune Choi was CTO at the time, enough said. The mentioned 2.8 billion won is what the 2 Board members of the Foundation requested. The mentioned fund was collected by Pre-ICO and are already fully invested by BlockchainOS for the BOScoin project. The Swiss Foundation was founded with this fund as well. However, this investment was gathered before the Foundation was actually established, so it does not hold any ground accounting-wise. This is where the problem is birthed. Accounting audit suggested to process the project investment as debt, and the 2 board members requested to process it as a debt that the Foundation lent to BlockchainOS. Accounting wise, it clears things up. However, now BlockchainOS suddenly gets a 2.8 billion debt that is not rightfully given. This too, just as HaeKwan Lee is angry, BlockchainOS has raised as an issue of breach and wanted to discuss for ways of resolve, and is why BlockchainOS finally has opened the issue up to the public.

Accusation 8. Over 1 billion won was spent on Kim & Chang’s Law firm. Because this amount was not utilized for the company nor the Foundation, but as a mean of processing dispute over corporate governance, it should be reimbursed for breach of duty.

We are currently processing a civil and criminal lawsuit. Also, it was mainly used to protect the business rights of the company and its project, not to argue about corporate governance. I won’t comment further since it is an ongoing lawsuit.

Accusation 9. Myungsan Jun earned some profit by buying his books in bulk for the company, and utilized the company’s money to publicize his name.

Myungsan’s book, Blockchain Government is published in Korean and English, which a total of 140 books in Korean was purchased through the company. The total royalty is 238,000won. English books were purchased at Amazon for a cost-free rate of $3.97 per volume (original price of $19.99), purchased without paying for royalty. The books were presented to influential persons who visited the company or persons of the media. English books were used when meeting a foreigner in the S.Korea or overseas when presenting our Project. When the books are depleted, it is requested again by marketing. Additionally, having a branded person in the company is not a loss to the company but rather increases the company and project’s awareness.

If you were a shareholder, you could have visited the company yourself to directly express and check these concerns, but rather you decided to publicly make accusations without fact verification or notification. We question these intentions. Thanks to you, we were able to publicly express the details of what happened in the company’s history. It doesn’t matter. Though embarrassing since not everything was met with the best decisions, we have decided to release all facts to not harm those who have supported and funded BOScoin. I can’t help but express my sadness that you have raised such accusations without seeing such efforts.

I advise that you visit the company and request an explanation rather than only listening to those close to you from here on out. We have decided to open all materials to the public and have been doing so. All explanations are ready to be given.

Thank you.

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      BlockchainOS CGO Myungsan Jun