Sinjin David Jung wants to win a Nobel Peace Prize for his Southeast Asia-based stablecoin, a project to which he’s dedicated the past 18 months of his life. In a crypto ecosystem crowded with stablecoins, Jung is optimistic about his creation’s success. He knows how to win the regulation game because he’s been there before with gambling.
Jung was the regional marketing director of online poker room PokerStars Asia from 2007 to 2010, where he cofounded the Asia Pacific Poker Tour and the Macau Poker Cup (last year’s winnings totaled $10 million in Hong Kong dollars, or $1.2 million U.S.). During this time, he was largely responsible for the legalization of poker in Macau, now a global gambling hub.
In 2006, “gaming wasn’t big in Asia outside of casinos,” says Jung. The Sands Macau, the region’s first Western casino, had only just opened two years earlier, but there were no poker tables, and therefore no regulation around the game. In Macau, each new type of game has to be individually approved and regulated. In other words, casino operators couldn’t just set up shop and launch any game they wanted. PokerStars came to Asia in 2006, and try as the company might, it couldn’t manage to close any agreements for launching a poker tournament.
"If you look at crypto right now, and you look at all these exchanges trying to open up in different jurisdictions, that’s what we were doing in the course of one year [at PokerStars].”
So PokerStars turned to Jung. The company knew of him from a 2004 deal in which he’d negotiated the contract of professional poker player Bertrand Grospellier (known as “ElkY”), who ended up staying with PokerStars through 2018. Jung, who is from South Korea, had worked as a senior analyst at a Korean government technology agency and was then working at PricewaterhouseCoopers on licensing and negotiations.
In almost a year after PokerStars set out to launch its Asia Pacific Poker Tour, the company hadn’t been able to close agreements for anywhere but Manila. Jung says he and the Australian Danny McDonagh, now the executive tournament director at PokerStars, closed the remaining agreements in about a month. Jung took care of some leftover details in Manila and closed Korea; McDonagh covered the stops in Australia and New Zealand. (McDonagh did not respond to a request for comment.) PokerStars brought Jung on full-time in November 2007, where he helped start Macau’s first Texas Hold’em poker tournament and shaped regulations with the region’s gaming commission, the Gaming Inspection and Coordination Bureau (DICJ), that ultimately led to the legalization of poker there.
“He was pretty instrumental,” says Andrew Scott, who was then the CEO of World Gaming Magazine, a gambling-focused media company based in Macau. (Scott is now the CEO of O Media, which owns WGM and other gaming-related media brands.) Since poker was new to Macau, Jung and others working on legalization had to “make up the rules as they went along.”
“Starting a business where there is no regulation is not a common occurrence,” Jung says. “If you want to do that over multiple jurisdictions at the same time, because you’re launching a poker tour, it’s an extremely massive undertaking. If you look at crypto right now, and you look at all these exchanges trying to open up in different jurisdictions, that’s what we were doing in the course of one year [at PokerStars].”
McDonagh and Jung went on to set up the first wave of poker rooms in Macau casinos. Jeffrey Haas, the director of business development in PokerStars’ Asia Pacific region between 2006 and 2009, also worked hard on legalizing the game. “Between [Jung and Haas], they got it all done,” says Scott. Ultimately, Jung got a crash course in bringing compliance to previously uncharted territory, dedicating extensive time to Know Your Customer requirements and, eventually, advising the set-up of online gambling licenses in the region.
Today, poker is legal across much of Southeast Asia, including Macau, the Philippines, and Singapore, in no small part thanks to Jung. (Gambling is also a significant part of some East Asian cultures, coming into play during certain holidays and festivities.) Based on his experience, Jung says crypto regulation should be a piece of cake. “[It’s] like a kindergarten class compared to the intensity that gaming was going through at the time,” he says.
It was during the later part of this period—in 2010—that Jung first learned about bitcoin. “Almost everyone in gaming was aware of bitcoin back then because it was another form of payment solution,” he says. Online poker companies started letting players make their bets with bitcoin.
However, the bitcoin betting trials didn’t work so well. Online gambling is either illegal or in a legal gray area in most of Southeast Asia, and it was especially problematic in the U.S., where gambling was (and remains) highly regulated. In 2015, for example, armed police raided the Las Vegas home of Bryan Micon, then a professional poker player who’d helped work on the bitcoin-supported gambling website SealsWithClubs, to deliver a warrant from the Nevada Gaming Commission. The site was shut down not long after.
Jung says using bitcoin in online gambling fell out of favor before for another reason. As he moved on from PokerStars to found Hero Poker, an online poker room targeting the Philippines, the price of bitcoin continued to rise. After it started hitting three digits, betting with the currency began to get cumbersome. “You would have to bet with 0.0001 bitcoin, and that makes for a weird table to play on,” Jung says. The price of bitcoin was also too volatile for both gamblers and poker companies.
“Cryptocurrencies probably would have had the best use case in gambling, and even for gambling, it was too volatile.”
“Gaming companies were very afraid of someone winning $10,000 in bitcoin and then wanting their money in bitcoin, when bitcoin had appreciated by five percent after four hours of playing,” says Jung. “That’s why it never truly took off. Cryptocurrencies probably would have had the best use case in gambling, and even for gambling, it was too volatile.”
Jung’s exit from TrueMoney Philippines, the remittances company where he was vice chairman after leaving Hero Poker, left him with enough cash to work on his stablecoin, Asia Reserve Currency Coin (ARCC), without having to worry about money. He describes the coin as a “macroeconomic stable coin made for emerging markets in Southeast Asia.” The goal is to align the currency with the region’s productivity, ultimately providing a way for the urban working poor to better their currently dismal standard of living—which hasn’t improved despite the overall economic gains in the Southeast Asian economy. He says neither he nor his cofounder Stanley Kwok are taking salaries at the business through which they’ll be issuing ARCC, International Blockchain Monetary Reserve. Jung says the company is entirely self-funded.
For his last two positions, Jung lived in the Philippines, where it’s common practice for educated people to move abroad to take menial jobs. Often, it’s the only way they’ll make enough money to support their families back home. “Almost every single person in the Philippines and Indonesia has to deal with that,” says Jung. Last year, about $30 billion was remitted to the Philippines, the fourth largest sum remitted to a country worldwide.
Changing this reality means getting at its source, which Jung calls “systematic corruption.” For instance, he says that infrastructure continues to fail because those in charge keep pocketing funds meant to fix roads and improve public transportation.
Jung’s plan is to create an app that would let people report these infrastructural problems, and other issues indicative of corruption, in exchange for a “fixed amount” of ARCC—kind of like how people can report traffic jams or car accidents with Waze, but with crypto rewards. “It’s a way for them to socially mine,” says Jung. Meanwhile, through IBMR, he and Kwok will invest in regional projects that focus on infrastructure or employment—all with their eyes on building the “biggest stack.” Launch of the Waze-like ARCC Android app is projected to take place by the end of June 2019.
If the cryptocurrency industry could learn one thing from the gaming industry, Jung says, it’s how to wait. “Regulation takes time—and you need to be prepared to work in different jurisdictions and not expect the jurisdiction you want to work in to bend to your will.”
Jung is prepared to wait eight years for ARCC to achieve stable value without being pegged to any fiat currency. How Jung envisions this happening harkens back to poker’s “big stack strategy,” in which poker players attack opponents with the fewest chips and leave the person with the biggest stack alone. Similarly, Jung envisions having “the biggest absolute diverse stack of assets” to support ARCC.
Today, Jung has mixed feelings about his role in the spread of gambling in Southeast Asia. He’s stepped back from the industry—though he still advises hedge funds and public gaming companies on a limited basis—and he says he’s “wary” about how accessible online gambling has become in the region. In a May 2016 article in The Korean Herald, Jung was quoted saying that opening up a new casino in South Korea “would destroy” the country. Casinos are, after all, notorious for tearing down local economies.
ARCC could, then, be Jung’s shot at redemption. With it, he has the chance to create something that will economically bolster the same region he targeted when he was pushing for the spread of poker. But he doesn’t exactly see it that way.
“I think more than redemption, it was a realization that all the experience, knowledge, and network that I had accumulated over the past 15 years led me to this point,” he says. Now he’ll just have to employ the patience he learned from gambling regulation to wait for his Nobel Prize.