Will LUNA and LUNC cryptos die? The Luna scandal continues to rebound. Do Kwon, the CEO of TerraForm Labs is under an arrest warrant issued by the South Korean justice! So what impact on LUNA and LUNA CLASSIC tokens?
Various arrest warrants issued against Terra executives.
Various key figures of TerraForm Labs are now under arrest warrants from the Korean justice. Among them is the whimsical co-founder and CEO of TerraForm Labs, Do Kwon. Nicholas Platias, another co-founder of TerraForm Labs, and Han Mo an executive of the company are also under arrest warrants.
The Korean judiciary accuses the company's officials of fraud and violation of the law on markets and capital.
The warrant was issued by a joint securities-related financial crime investigation team from the Seoul Southern District Prosecutor's Office and the 2nd Financial Investigation Division. This mandate is valid for one year.
Do Kwon is currently in residence in Singapore. It was from the small Asian state that he spoke a few weeks ago on recent events.
Back to the Fall of Terra.
It has now been 4 months since the Terra Luna ecosystem collapsed. It all started with the depeg (loss of parity with the dollar) of the house stablecoin UST. This stablecoin was the 3rd largest in the market. Investors appreciate this token due in particular to the returns of Anchor Protocol at almost 20% per year.
Leading to a cascading reaction, it was the turn of LUNA, one of the 10 largest capitalizations at the time, to collapse. In a few hours, the token went from more than $80 to a few cents. The Luna Foundation massively sold the bitcoins in reserve to refloat the ship, but it was a waste of time.
A collapse that led to the bankruptcy of many players in the ecosystem such as Celsius, Voyager, and the investment fund Three Arrows Capital .
All of these companies found themselves overexposed to LUNA or UST due to poor risk management. Thus, they could not react to this sudden collapse of a rare violence.
Accusations of manipulation, in particular on the part of the founder Do Kwon, have flourished on the networks. A fork has been put in place giving birth to Luna Classic and Luna to raise the bar. But nothing seems to help and this recent announcement has once again plunged the remains of the blockchain into the abyss.
Recently, market watchers, Upssala Security, and Coindesk Korea have speculated about massive embezzlement by TerraForm Labs and Luna Foundation Guard.
Opaque and unlisted funds appear for an amount of more than 3.6 billion dollars! By analyzing the on-chain data, we observe the first shady transactions as early as May 6, i.e. before the date of the LUNA crash. This report also highlights the presence of three suspicious wallets. Taken as a whole, it strongly supports the thesis of embezzlement.
LUNA tokens unscrew.
Unsurprisingly, this bad news pushed the LUNA tokens towards another major drop. Recently, the Terra Classic (LUNC) and the Terra benefited from renewed enthusiasm from certain investors.
In the previous days, with the return of staking, various announcements regarding validators helped to push the price of LUNC upwards. In addition, a burning system has been in operation since September 12, fueling some buying pressure via a scarcity of supply. Likewise, the LUNA showed a good form with an interesting progression these last days.
This bullish momentum is stopped dead by these recent announcements. According to the specialized site CoinMarketCap, the LUNC has just lost more than 20% in 24 hours and more than 32% in one week. It trades for around $0.0002886.
Same story for Terra, which has just lost 32% in just 24 hours. It is still up almost 50% over the last 7 days. The stablecoin TerraClassicUSD (USTC) is down nearly 25% over the past 24 hours. It is therefore the whole ecosystem that toasts.
Hard to imagine that the fall for the three tokens stops here. The general bear market context is not helping and the bad news is increasing for these projects. Many market observers are calling for these projects to die, as they continue to cost their investors dearly.
It is difficult to predict what will happen next for Luna, but these recent announcements add to an already busy file. They do not bode well for the future of one of the most infamous crypto projects!
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