An exclusive Q&A with Waves founder Aleksandr Ivanov

DL News’ Paige Aarhus sat down with Ivanov earlier this month in Dubai for a story on the Waves blockchain. Here’s a transcript of the interview:

DL News

You’ve crossed paths with our reporter Tim Craig, who wrote a couple articles about Waves. And you mentioned a quote that we had about the Russian mafia, which you didn’t like. Maybe we could just open with that, like, was that a joke?

Ivanov

It was like, to keep the chat basically, it’s not moderated. I was just trying to cheer people up a bit.

DL News

Okay. All right. So you weren’t being serious when you were saying –

Ivanov

Because I left Russia a year ago. I lived there for many years. I was born in Ukraine, so I had to leave.

DL News

Do you keep in touch with people in Russia?

Ivanov

Sure, absolutely. We were like, probably the biggest blockchain company in Russia. And I believe the guys are there. But they have no way – I am talking to them. Like I’m telling them what to know, like your relations or business. But they’re protected.

DL News

That was one of the things like, what I want to talk about too, is rumours that are out around there on social media. And one of them was that you’ve sold Waves to a Russian oligarch.

Ivanov

Like some other group is trying to – Because I have some enemies in Russia as well. And they’re trying to, I can prove actually that they’re bidding. But I don’t know what it actually means because obviously – If you read (the tweet) from six months ago, Waves was sold. But how can you sell the blockchain?

DL News

I mean, to sell the company would imply that there is some entity that’s established somewhere. So, a business entity that is registered would be involved, basically.

Ivanov

So what I did, I left the company to the management and they have no options. It wasn’t sold.

Management in Russia

DL News

So it’s under management in Russia, by Russians?

Ivanov

They’re there, they’re working actually, and I think they’re doing pretty well under the circumstances. Yeah, but I’m not working with them.

DL News

So, you’re not involved with Waves at all anymore?

Ivanov

It’s kind of weird. It’s the blockchain. Like, how can you be legally involved with a blockchain? I don’t know. Because I don’t have any more ways.

DL News

So you’ve severed ties with –

Ivanov

Yeah, because I had to sell, because we moved like 200 people out of Russia … There was a very heavy pressure from exchanges. The Koreans were pretty crazy. And Binance, Binance was pushing us to phase USDN out. It was not a stablecoin anymore. I’m not a big fan of them, but I thought that it would be probably a good decision to do that … It went downhill, and so I had to sell all the Waves, because we moved a lot of people out of Russia.

DL News

There were concerns as well that you’re being bullied by the Russian mafia to extract money from crypto. Are you saying this is categorically not true?

No ties to Russian mafia

Ivanov

Who, myself?

DL News

Yeah, that you are under pressure from the Russian mafia –

Ivanov

No.

DL News

That’s not the case? No links, no ties to the Russian mafia?

Ivanov

No ties to the Russian mafia whatsoever.

DL News

Ok well, that’s good.

NOW READ: Waves Labs suffered ‘financial damage’ in six-month-long hack

Ivanov

I’m not being threatened by the Russian mafia, I have no ties to the Russian mafia.

DL News

Great, okay, great quote. Next up, what will happen to the money that Huobi deposited into Vires Finance? Was Huobi paid back in full?

Ivanov

We are dealing with them on the same terms as with the other people who have money on Vires … But I think there is some, like, a lot of restructuring at Huobi. So I’m not really sure that they’re interested. Like they’re not interested. They have a lot of other things on their plate right now.

Not publicly disclosed

DL News

Okay, so the money hasn’t been paid back yet.

Ivanov

It’s still there. But it’s also visible.

DL News

There was also a question about the Waves system, you told Tim (Craig) that it got hacked in December last year, but this was never publicly disclosed.

Ivanov

Yeah it’s kind of weird, actually, there was some problem with that. But I’m not gonna pin it on the hackers. There was a hack, but it wasn’t announced publicly. And I’m not sure that it’s time to do that, because they are still trying to find the hack. And some exchange, I won’t name it, wouldn’t reveal their data. Because it was pretty visible where the money went … Our JIRA was hacked last year, probably in the summer. And [the hacker] seemed to have our internal JIRA data.

So, there was some financial damage as well, but they can’t really estimate, but it wasn’t major damage.

—  Aleksandr Ivanov

DL News

So the hacker had internal data, and you decided not to disclose?

Ivanov

I’m just trying. I can do that, but I’m not sure that it’s gonna be useful. And also, we are still waiting. We’re still talking to the exchange about the data. So, there was some financial damage as well, but they can’t really estimate, but it wasn’t major damage.

DL News

Could you give me a ballpark like $10 million, $5 million?

Ivanov

We could have had much, much bigger financial damage. Like yeah it was a bad situation, because those guys sneaked in undetected, they were in our infrastructure for maybe half a year … One of them started messaging like, “We have been in your system for half a year. So we know everything, so you have to pay us.” So I think they just left, and then we had to do some security audit … It was a pretty bad situation. But like why I’m not like trying to announce publicly, is because I’m not gonna try to, like pin the bad situation on the hacker. Because we had a lot of things going on, we had to basically move 200 people out of Russia

DL News

Were you not concerned that if you didn’t disclose the hack, people in the community would be upset with you? Like was it in your mind?

Ivanov

No, no, I’m not I’m not crying, because we had similar situations before. And actually, I was able to resolve it without like, crying out loud that we had been hacked. I’m not sure that this helps. Now if I said that we had been hacked, I don’t think they were very beneficial, or like the situation, which is that people would think that I’m trying to pin the situation on the hackers. Maybe we’ll announce, but I just want to understand who those guys are. And there are some like, I don’t, I can’t reveal the name of the exchange but somehow they just need to give us the data. Because we also have police reports and inquiries, both from, like long ago, which are in Russia.

Everything on-chain

DL News

Okay. Next up, we have an Ethereum wallet that starts with 0x9C02. And it sent $900,000 to the 3PEEs wallet, which was involved in the Vires looping? Do you own that wallet?

Ivanov

It’s all on chain, you know, so I can’t really – I wouldn’t like to comment on that. Because it’s all on chain.

DL News

I think the question is like, is that your wallet? Or is it someone else’s? I mean, if you don’t want to confirm that –

Ivanov

Like, my point here would be that you can trace everything on chain, you can also probably reach out to Binance, maybe with some kind of subpoena. And if somebody wants to, they will have to reveal all. It’s not a big deal actually, it’s very much legal. If people want to do it, I won’t do anything to prevent it.

DL News

Yeah, I think the question just came because there’s that announcement that you had bought $5 million of USDN the only transaction that we could find that matched the $5 million purchase was that wallet.

Ivanov

Ah yeah so I remember, I remember. It’s very funny, because what I was trying – yeah, it was probably a little bit dumb on my part. The idea was to – because there was a situation with LUNA, and a guy tweeted something like “I just woke up this morning, like I brushed my teeth, and bought some LUNA,” you can check that. He was saying that like I’m waking up and buying LUNA and it’s fine. And I was just like, it was very funny because I understood what was going on there with LUNA … Actually I talked to Do Kwon once and he was very confident in LUNA’s future. So yeah, but I understood that the LUNA situation was not that good, and I was just trying to have some fun with it. So that was made on the same day that very easy to check. It was like a copy of history, basically some kind of play in history.

DL News

Just, it was such a weird coincidence, because someone did actually make a $5 million purchase that day. So were you just like, riffing, you’re just kidding?

Ivanov

Yeah, we were trying to – basically we spent I don’t know how much money to try to support USDN. I think it’s like dozens of millions of dollars, basically, like $30 or $40 million dollars was spent just trying to maintain that. So people are just picking one transaction. But they’re like, they’re not seeing the full picture. And as I said, it’s all on chain. So why blockchain is good, you can trace everything, you can see everything on chain. Those people want to FUD, because other people made a lot of money shorting Waves, for example. Maybe there was some coordinated thing, but I’m not gonna come up with any kind of conspiracy theories because I can’t prove that. But people are fudding because they’re shorting. And there have been a lot of shorting groups, so just on Twitter, and that’s sort of visible to me because like, I’m a Twitter user, I can see all those accounts.

Looping scheme

DL News

Okay, so it seems like there’s been a few like maybe jokes that were taken very seriously by the community … So now we can move on to your personal wallet starting 3P84. You have publicly stated it’s yours and it appears in Vires Finance governance proposal to assume the 3PEES debt and other wallets’ debt. Why did this wallet send millions of USDN to a wallet beginning 3P87, one of the wallets central to the Vires looping scheme?

Ivanov

Yeah, basically, I just would like to remind, people forget about that: I publicly assumed all the debts a year ago. There was a situation with Alameda when they tried to short Waves, it was obvious, it’s like, it’s proven … Alameda borrowed on Waves and they shorted it; it was their email basically telling me that. This is why I assumed that debt a year ago. And I think that basically, to answer all those questions it’s all on me. I’m like in charge of it so I’m not trying to push blame on anybody so I’m not trying to find some like culprits or like people I can accuse of something. I’m saying guys, I’m trying to resolve this, I’m gonna be doing this until it’s resolved.

DL News

So sending those millions of USDN to one of the Vires looping wallets was part of you assuming the debt?

Ivanov

No, I mean, what do you mean? Basically, there was bad debt from Vires. And there was USDN. And there was a situation on Vires when people couldn’t withdraw their stables, and the only way through all this was to try and sell the USDN. Unfortunately, it didn’t work out. But I was pretty confident that it was possible. Basically, I assumed the debt and we started with like, selling it and repeating the debt, but things went downhill for the crypto market and we couldn’t maintain the peg. And that’s why we had to sell all the Waves. But Waves was going down faster. If we had more time, maybe we would have been able to liquidate. It just went down too fast. And I was wrong. Like, actually, literally the work we were trying to do the whole last year, we launched a US company, and we have an office. It was happening at the same time. So it was a very weird situation because we were trying to do some business development in the US.

Miami office

DL News

Ah yeah, because there was a lawsuit too where they actually went and tried to find the office in Miami … Did you ever have an office?

Ivanov

Yeah. Some people were there, but then we had to fire everybody. We also gave up the office maybe a month ago.

DL News

What’s next for you? Is Waves a thing anymore? Are you going to move on to a new project?

Ivanov

I can’t leave Waves because it’s impossible. Like because it’s my thing. And I’ve been doing it for years, so I’m not gonna do any kind of rebranding. And so, everything that’s going to be launched, maybe, will be meant to help resolve the current situation, and maybe be valuable in its own right. We have also ideas about Blockchain scalability, can I begin to combine resolving the current situation with doing something valuable? It’s my goal. I just want to do something meaningful, and probably a lot of people hate me, but it’s like well, I’ll just be doing my thing because this is what I’ve been doing for years. I’ll say that being in Russia was kind of interesting. I won’t complain but I don’t think this (Waves) is the worst situation that we have actually, there’s worse, and so I’m kind of like I don’t care. I will be doing my thing no matter what, and this is not a pleasant situation because of things I didn’t really expect because I didn’t have any gut feelings, things just really came out of the blue.

Financial situation

DL News

Have you ever scammed anyone?

Ivanov

No, no. No, I’m not I’m not gonna be saying anything about my financial situation because people don’t like, don’t believe me. So yeah, it’s tough. It is tough, but I really don’t care. I don’t care about money. I would have been able to probably leave crypto with half a billion around 2018. I just don’t care actually. If somebody will try to find some money, I wish him well and it’s not like I have hidden secret money okay? That sounds very weird to understand because people are in crypto for money but I came to crypto around 2014. Like, it sounds very, like, too fancy, but it was meant to change the world maybe. AI is something like that. I wasn’t very successful as a businessman, I was trying to make my living with trading robots and payment systems, but I wasn’t very wealthy. I wasn’t interested in doing business in general. And then I found blockchain and this is something that kept me going. For me it’s not about the money, it’s about the technology and it always has been.

DL News

There are lots of crypto people in Dubai. Do you get out and go to events, see anyone?

Ivanov

I’ve never been to an event here. Maybe I should try and raise some money, maybe I will go to events. And we have made our own events last year but small, for Waves people … I’m not sure that it’s very useful to go to events here.

DL News

Do you think you’ll ever go back to Russia?

Ivanov

No, I’m not gonna go back to Russia. Maybe to Ukraine. And like, it’s a very weird situation for me, because I’d like to be more involved with, like, resolving real issues in the world.

DL News

But if you go, you’ll get drafted right?

Ivanov

I would go back actually, but I have to deal with this shit. I have to deal with it, otherwise I wouldn’t be in Dubai.

What’s next for Waves

DL News

Do you want Waves to continue?

Ivanov

Sure, as I told you, nothing will happen to Waves because we have ideas regarding scalability, some stuff we can do with the blockchain, Waves 2.0. And so basically, the plan is still there. It’s just not moving fast, actually.

DL News

So you do want to make people whole, who have lost money?

Ivanov

As I promised a year ago, everyone will be made whole. Nothing changed. It just turned out to be more difficult than I thought. Realistically it will take maybe two years. If something comes up maybe we can launch some new product, if nothing major happens two years is the timeline. Because there’s a lot of money, actually some people like Huobi for example, who have a lot of money stuck there – so maybe like small guys, maybe just like one year. But for example, there was Alameda which has like $80 million in Vires. That has to be dealt with actually. It’s probably gonna take some time, taking into account not the retail guys, I think they can be handled much faster.

DL News

I’m not going to keep you much longer. But before I turn off this recorder, is there anything else you’d like to say? Or anything that I should have asked you?

Ivanov

My plan was not long ago, when I assumed the debt on Vires, so I’m working to make it whole. Everything that will happen on Waves is meant to achieve that. So anything that launches on Waves will be meant to make it whole. Everything we do is actually for the community. So no matter what happens, no matter how you hate me and threaten me, it doesn’t matter. I will keep going until the situation is resolved.

DL News

Thank you so much. I’m gonna turn this thing off.