After the Divorce, I Found a Thousand Bitcoins - Chapter 33

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This chapter was translated by Lunox Team. To support us and help keep this series going, visit our website: LunoxScans.com
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I Got Divorced and Found a Thousand Bitcoins Episode 033

Returning to the hotel, Kang Hyeon immediately turned on his tablet.

He accessed KH Capital’s internal system that Kwangho had created and gathered the necessary information.

“Collecting all sectors related to data centers…”

With a few clicks, companies related to currently listed data centers appeared on the screen.

All those companies were connected like a web with black lines.

“As expected, the color is darker.”

They were connected with a darker shade than the black lines he had seen in the AI sector before.

Based on his experience so far, he could tell that the darker the color, the sooner changes would occur.

The stock with the darkest color was Arkon.

Just like the color emanating from CEO Edan Coldwell, it showed the same abyss-like darkness.

“This means it will start declining soon. There’s definitely a problem with the company.”

Kang Hyeon immediately opened the company messenger and posted an announcement.

[Please gather all information related to Arkon. Especially, I want you to identify if there are any recent investments they’ve made or are scheduled to receive.

Also, please look into whether there are any issues with Arkon’s CEO, Edan Coldwell.]

Not long after posting the announcement, a message arrived.

[Employee Kim Ha-ryul: This is the first report on Arkon. I’ve focused on writing about whether there are any issues with their current investment details as a priority.]

The information gathering was fast.

Though it was late here, it was just the start of the workday in South Korea.

Kang Hyeon reviewed the documents and immediately proceeded with a video conference.

“Let’s begin the meeting.”

Four screens appeared on the monitor.

Kang Hyeon was in the upper left, Kwangho on the right, and Kim Ha-ryul and Kim Seong-won below.

“I’m thinking of betting on the decline of Arkon and data centers.”

After hearing Kang Hyeon’s strategy, Kwangho spoke first.

-What’s the method? Are you thinking of going with short selling?

“If we go with short selling, our funds will be dispersed. Plus, the expected returns are lower than expected.”

The cash capital that KH Capital could currently operate was around 500 billion won.

They could take out loans using the Yeongjong Island land as collateral, but he didn’t intend to go that far.

Most importantly, even utilizing all leverage, it would be difficult to achieve 100 percent expected returns through short selling.

In previous trades, they had made most of their profits through CDS as well.

-I agree. Moreover, given the current legal risks, I think bond purchases would be better than short selling.

The biggest problem was the legal risk.

Currently, KH Capital was exposed to the FBI and SEC due to the large-scale short selling of NextMove.

And now, less than a year later, they would conduct another large-scale short selling operation?

They would target KH Capital and launch a major investigation.

Even without committing crimes, being investigated by them was never a pleasant affair.

“I think the same way. We’ll go with bond purchases and CDS protection.”

With the direction decided, they moved quickly.

Kang Hyeon immediately scheduled a meeting with JP Morgan.

Though they could have held a video meeting, since he was in New York, he decided on an in-person meeting.

And the person who came to the meeting was.

“I didn’t expect Richard to come personally.”

“I happened to have time available. And your trades always pique my interest.”

Richard Blake came personally.

Facing him, Kang Hyeon immediately got to the point.

“I want to purchase Arkon bonds.”

“What’s the scale?”

“350 million dollars. I’d like to set it as 5-year bonds.”

“That’s quite a large scale. The returns won’t be very high, will they?”

Richard Blake’s advice was accurate.

Arkon was currently overvalued at this point in time.

Even purchasing their bonds, it would be difficult to expect high returns.

But that wasn’t Kang Hyeon’s goal.

“I’d also like to purchase CDS.”

“The purpose would be hedging then. What’s the notional amount?”

“1.75 billion dollars.”

An interesting light appeared in Richard’s eyes.

‘This is essentially betting on a decline.’

It was a clever strategy.

Simply taking short positions would be a poor strategy.

The positions would likely be exposed, and most importantly, KH Capital was under FBI investigation.

Naturally, they were also marked as a company of interest by the SEC.

In this situation, conducting large-scale short selling would result in intensive investigation.

‘Plus, the premiums are cheap too.’

Naked CDS without collateral would have high premiums.

Moreover, being high-risk trades, the leverage scale would also be reduced.

In other words, Kang Hyeon’s choice was correct.

“For this scale, the premium would be 140BP. Will you also set up netting?”

140BP meant paying an annual premium of 1.4 percent.

Netting was a term for offsetting money to be exchanged and settling only the difference.

“Yes, let’s do that. And I’ll prepay one quarter’s premium first.”

“Understood, then let’s prepare the contract.”

The contract was prepared quickly.

Arkon bonds were already abundant enough in the market, and CDS were also issued regularly, so there were no liquidity issues.

Swoosh-!

Having finished signing the documents, Kang Hyeon shook hands with Richard.

* * *

On the way back to the hotel.

Kang Hyeon contacted the company.

“Yes, the contract has been concluded. JP Morgan will contact you soon. Just process it as usual.”

Just because the contract was finished didn’t mean the trade was over.

JP Morgan would broker the corporate bonds available in the market while simultaneously establishing a CDS protection contract based on those bonds.

Accordingly, the necessary fund transfers were handled by the company.

‘With this, the preparations are complete.’

The bet anticipating a decline was finished.

He had structured it so there wouldn’t be major problems even if investigations came from the FBI and SEC.

Now what was needed was waiting.

‘I wonder what will be the trigger? And will this spread throughout the AI industry?’

Kang Hyeon was curious about how things would unfold.

Just then, Kang Hyeon’s smartphone rang.

Ring-!

He checked the number, but it was an unknown number.

After hesitating for a moment, Kang Hyeon answered the call.

“Hello.”

-Mister Choi?

The language coming through the phone was English.

Kang Hyeon skillfully responded in English accordingly.

“Yes, I am Mister Choi.”

-I’m FBI Agent William.

His expression hardened at the mention of FBI.

-We’ve confirmed you’re currently in New York. Could we meet briefly? I’ll come to you.

“Is this an investigation?”

-Oh, it’s not an investigation. We just want to have a brief conversation with you as a reference witness.

The procedures for investigating foreigners are complex.

So that’s why he was saying reference witness.

There wouldn’t be any major problems even if he refused here.

But to continue trading in the United States, he needed to first escape from the FBI’s investigative net.

“Understood. I’ll contact you again within today.”

-Please contact me at this number. I’ll be waiting.

After hanging up, Kang Hyeon immediately called JP Morgan’s private banking team.

“I need a lawyer.”

He needed to prepare to face the FBI.

* * *

Two hours later.

He found himself facing William and two other FBI investigators.

“I’m William, who called you. These are my colleagues Billy and Michael.”

“Nice to meet you, I’m Choi Kang-hyeon.”

“I’m Raymond, the lawyer.”

Next to Kang Hyeon sat lawyer Raymond, who had been introduced by JP Morgan.

Raymond, having finished introductions, spoke first.

“Before we begin our conversation, I’d like to state that since this meeting is not an investigation, it has no legal effect.”

He was a reliable lawyer.

Well, since JP Morgan had introduced him, they wouldn’t have introduced someone incompetent.

“Of course. We’re not here to arrest Mr. Choi right now either, we just want to confirm the facts.”

From William’s words, he could roughly sense what purpose they had come for.

“Mr. Choi, according to materials provided by South Korea, the short selling of NextMove was initially triggered by WSJ’s report. Is that correct?”

Their questions were at a predictable level.

Since information from this side had already been passed over, he had expected such questions would come when they said they were confirming facts.

Kang Hyeon told them the facts exactly as they were regarding those questions.

When the conversation moved to sensitive topics, Raymond blocked them, so there were no major problems.

The brief investigation that wasn’t an investigation was concluded after about 30 minutes.

“This matches what we investigated. Thank you for your time.”

After shaking hands with William and confirming they had left, Kang Hyeon sighed and slumped onto the sofa.

“Phew… Having a conversation with the FBI is harder than I thought.”

“Most people find it difficult when they first talk with them. But you did well without trembling.”

“Is that so?”

“Yes, judging from their attitude and conversation, it seems like it was a nominal investigation rather than investigating with suspicion. This is a very big difference.”

“What do you think will happen going forward?”

“Judging from their attitude and conversation content, I think it will end at this level. They have no evidence to connect Mr. Choi to the NextMove incident.”

Raymond’s words meant the conclusion of the NextMove case.

“That’s fortunate.”

The FBI had been his biggest worry, but it seemed he wouldn’t need to worry about that anymore.

* * *

Time passed quickly.

Kang Hyeon had essentially taken a short position on a stock called Arkon and watched how the situation unfolded.

[Arkon secures large-scale investment!]

[Arkon rises again today!]

[AI rally continues, crushing AI bubble theory!]

Making his short position seem pointless, Arkon’s value soared day after day.

Not just Arkon, but AI-related stocks rose daily, crushing the forecasts of pessimists who argued for an AI bubble.

-AI is god!

-Kyaha! Arkon profits are sweet!

-Those shouting AI bubble are probably shitting blood.

-Go! Go! Go! Go!

└Let’s go!!

-Let’s go to the moon like this!

-Isn’t Michael Burry getting liquidated?

└He’s probably playing drums again.

-Bros, can I get in now?

└ US market is god and NASDAQ is truth. Quick buy let’s go

Various communities were flooded with stories of making money from stocks.

The atmosphere was to dismiss all bubble theories coming from the market as nonsense.

Many investors believed this atmosphere would continue.

But the atmosphere at KH Capital was different.

“The spread has widened from 140BP to 190BP.”

Hearing Kim Seong-won’s report, Kang Hyeon’s gaze turned to the screen.

All AI sector stocks were rising, but credit was generally shaking.

This meant institutional investors were viewing the future of recent AI-related stocks with anxiety.

‘Arkon, one of the core components of data centers, is the same.’

Kang Hyeon shifted his gaze to check the data center sector located on the right.

The sector connected like a black web was emitting intense light like a bomb about to explode.

‘The time has come.’

The anxiety that ordinary investors couldn’t feel was about to burst.

Then Kim Ha-ryul raised her voice.

“Breaking news!”

Click!

As she clicked the mouse, an article appeared on the main monitor.

[(Breaking) Red Owl suspends investment discussions with Arkon.]

It was breaking news that appeared on Bloomberg Terminal.

Then Kim Seong-won’s voice followed.

“Arkon selling pressure increasing! It’s reversed to decline!”

“Selling pressure is coming out on all stocks in the data center sector!”

“It’s expanding to the entire AI sector!”

The trigger had been pulled.

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This chapter was translated by Lunox Team. To support us and help keep this series going, visit our website: LunoxScans.com
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