Category: Terra

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Terra TerraUSD

Korean Authorities Target Terraform Labs Staff for Questioning

Despite launching a new blockchain for LUNA, things appear to be going from bad to worse for Terraform Labs as revelations emerge that South Korean law enforcement officials are probing its staff in relation to the LUNA/UST implosion:

Authorities Dig Deeper into Terra Ecosystem Collapse

According to a report by a local news outlet, prosecuting authorities have commenced a full-scale investigation into the Terra unwinding. The report notes that it spoke with several employees involved in the development of the project, with one stating:

Even at that time, there was a warning inside that there could be a collapse at any time, but CEO Kwon Do-hyeong forced the coin to be launched.

Anonymous Terraform Labs employee, JTBC

According to local news agency JTBC, a team focused on prosecuting securities-related crimes summoned all Terraform Labs employees and developers to submit any related materials they might have. In addition, all employees either have been or will be investigated as part of the process.

The prosecution managed to secure a statement from one anonymous employee who worked there from 2019, claiming that LUNA and Terra should not have been launched since its own internal pilot model had failed:

If you pay interest of several tens of percent to investors without a stable collateral or profit model, people may flock to you at the beginning, but at a certain point in time it has no choice but to collapse because it cannot handle interest payments and fluctuations in value.

Anonymous employee, Terraform Labs

The report went further to describe how this was not founder Do Kwon’s first attempt at a cryptocurrency, the other being Basis Cash which, much like LUNA, fell sharply after an initial price increase.

Prosecutors said they were investigating the matter in its entirety and whether there was any “intentional price manipulation or whether the domestic virtual currency exchange went through a proper listing review process”:

Stormy Times Ahead

Meanwhile, as official investigations continue, 76 victims have filed a formal complaint with the Prosecutor’s Office against Terraform Labs, Do Kwon, and co-founder Shin Hyun-seong. According to JTBC, in total the complaints are tied to losses worth 6.7 billion won (US$5.4 million):

Simultaneously, police are attempting to freeze the Luna Foundation Guard’s remaining assets, not to mention the US$78 million tax evasion fine due by the crypto startup. If recent developments are anything to go by, Terraform Labs looks set to remain in the headlines for all the wrong reasons, at least for now.

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Crypto News Terra TerraUSD

LUNA 2.0 Launches Successfully as Previous Chain Renamed to ‘Terra Classic’

Following the implosion of LUNA and UST, this past weekend saw the launch of Terra 2.0, albeit without an algorithmic stablecoin which arguably led to Terra Classic’s downfall.

Terra 2.0 Goes Live, Tokens Airdropped

Terra’s new blockchain launched on mainnet with the express intention of reviving the Terra ecosystem. This follows the dramatic collapse of its algorithmic stablecoin UST, which depegged from the US dollar a few weeks ago.

With the new chain operational, the original network has since been renamed to “Terra Classic”, whose tokens are now known as LUNA Classic (LUNC). Interestingly, the new blockchain has elected to steer clear of an algorithmic stablecoin, instead electing to stick with LUNA tokens only.

LUNA apparently has a fixed supply of 1 billion, relative to LUNC’s supply which is over 6.5 trillion. As per an official announcement, holders of LUNC will receive 70 percent of the total supply, with the amount depending on whether the tokens were held before or after UST’s depeg.

Holders can expect to claim their LUNA from a participating centralised exchange or Terra’s own website. Critically, not all of the airdropped tokens will be claimable at launch, as only 30 percent of the initial supply may initially be claimed. The remaining 70 percent will be staked directly with validators to “ensure network security” for a period of up to two years.

Aside from the 70 percent allocation to LUNA Classic holders, the remaining fixed supply will be allocated to Terra’s treasury.

LUNA Off to a Difficult Start

Shortly after going live, LUNA dropped precipitously by some 80 percent. While one could infer that this points to a lack of faith in the new blockchain, others had a more pragmatic outlook:

Still, Terra’s outspoken founder Do Kwon remains a controversial figure and, on announcing the new blockchain going live, has received a swarm of responses questioning his character:

Notwithstanding a successful launch of Terra 2.0, a hefty fine for tax evasion and a class-action lawsuit loom large for Terraform Labs. While the immediate future is uncertain, this saga is certainly far from over.

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Crypto News Terra

Terra 2.0 to Relaunch on New Blockchain Without Algorithmic Stablecoin

On the eve of Terraform Labs’ May 27 second coming, to be known as Terra 2.0, trading platforms were said by Terra to be showing “overwhelming” support for the revival of the collapsed network by listing its new token as it completes its crawl from the wreckage.

No Fork for New Chain

The new chain will not be a fork, as previously proposed by Terraform Labs CEO Do Kwon. It will be created instead from the genesis block and shares no history with Terra Classic, as the old chain has been dubbed. The new Terra token will be named LU, replacing the old token referred to as Luna Classic (LUNC):

Among the exchanges intending to cooperate with Terraform Labs in its new incarnation are HitBTC and Binance.

Earlier this month, a “heartbroken” Kwon flagged his intention to create a new Terra chain without Terra’s algorithmic stablecoin, TerraUSD (UST), suggesting LUNA airdrops across LUNC stakers and holders, UST holders and Terra Classic app developers.

Despite as many as 91 percent of network validators initially voting in favour of the Terra “rebirth” plan, Luna investors last week applied for seizure of Kwon’s property in a class-action lawsuit filed in the hope of offsetting their losses.

Second Vote Records Reduced Approval

Terra’s revival comes after Terraform Labs halted the Terra chain on May 12 following a massive network crash, with the Luna token plummeting as low as 99.7 percent and UST losing its peg to the US dollar. The revival plan is moving forward after a second vote by validators on May 25, this time with a 65 percent approval rating.

The supply of tokens on the new blockchain will be just over 116 million, according to developers. Investors who held over 10,000 LUNA tokens before UST’s implosion will receive the new tokens in instalments to prevent immediate sell-offs.

At the time of writing, LUNA was reportedly up over 6.2 percent in the previous 24 hours.

Categories
Crypto News Stablecoins Terra

LUNA Investor Arrested for Knocking on Founder’s Door After Losing $2.4 Million

A South Korean investor who claims to have lost US$2.4 million in the Terra ecosystem collapse earlier this month has been arrested after knocking on Terraform Labs founder Do Kwon’s door and attempting to speak to him about the loss.

Despite not technically trespassing on Kwon’s property, the investor is believed to have broken South Korean law by trying to approach Kwon and will likely face a fine.

Lack of Public Statements Prompted Personal Visit

The investor, a social media personality known as ‘Chancers’, says he was distressed after suddenly losing three billion won (US$2.4 million) in the catastrophic collapse of Terra, after the Terra-based stablecoin UST lost its peg to the US dollar.

I felt like I was going to die. I lost a lot of money in a short period of time. Around $2.4m of my cryptocurrency was wiped out.

Chancers, aggrieved LUNA investor

This combined with virtual silence from anyone involved with Terra regarding the state of the network drove Chancers to attempt to speak with Do Kwon directly. 

After finding Kwon’s address online, Chancers travelled across Seoul to confront him in person, while live-streaming to about 100 viewers.  Explaining the intention of his visit, Chancers said: “I wanted to ask him about his plans for LUNA; I suffered a huge loss and wanted to talk to him directly.”

Wife Calls Police, Investor Turns Himself In

When Chancers arrived at Kwon’s property, he was greeted by Kwon’s wife who said Kwon wasn’t home and called the police.

The following day Chancers found out police were searching for him and on May 13 he turned himself in to the local station. Despite the fact he didn’t trespass on or damage any property, Chancers now expects to be charged and faces a fine and a criminal record.

“It’s so hard,” Chancers lamented. “I lost a lot of money and now I’m being investigated by the police. I originally served as a civil servant in Korea. But if I am convicted of this case, I may not be able to return to the civil service again.”

Other affected LUNA investors rallied to support Chancers on Twitter, and at least one of them offered some sage advice – albeit in hindsight:

In welcome news, South Korean authorities are also investigating the collapse of Terra to see if any crimes were committed in the lead-up, something many investors will be very interested to know.

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Terra

Crypto Billionaire’s LUNA Tattoo Reminds Him to be Humble in Investing

Galaxy Digital CEO and crypto billionaire Mike Novogratz broke silence on his Terra-LUNA-inspired tattoo a week since the cryptocurrency experienced one of the biggest crashes in DeFi history.

‘A Big Idea That Failed’

After TerraUSD de-pegged from the US dollar – dropping all the way down to nearly zero and dragging its sister coin LUNA with it – Novogratz issued an open letter to his followers, saying: “My tattoo will serve as a constant reminder of [the fact] that venture investing requires humility.”

Novogratz got his LUNA tattoo on January 4, officially declaring himself a “Lunatic” to his 450k followers on Twitter:

A Bitter Learning Experience

In the letter, Novogratz also said the crypto community would learn from these events and mistakes and will focus on building better decentralised infrastructure in future:

Crypto is not going away. The amount of human capital moving into the space isn’t slowing down. The focus on building decentralised infrastructure that allows value and ownership to flow as freely as information on the internet isn’t slowing down

Mike Novogratz, CEO, Galaxy Digital

Many Australians were also bullish on LUNA, as revealed in a Finder survey from March in which 36 fintech specialists expressed their belief that the currency would climb to US$390 by 2025.

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Bitcoin Crypto News Ethereum Investing Markets Solana Terra

Crypto Retail Investors Drop to 24% of Volume, Indicator Still Showing ‘Extreme Fear’

Retail investors are deserting the crypto market, with just over three-quarters of Q1 2022 trading volume at Coinbase coming from institutional investors, according to the exchange’s most recent letter to shareholders.

Support for BTC, ETH Holds Up Amid Terra Bloodbath

In spite of the past week’s crypto market downturn precipitated by the collapse of Terra’s $LUNA and its UST stablecoin, institutional investors are banking on the flagship cryptocurrency Bitcoin (BTC) and Ethereum rival Solana (SOL).

Latest analysis as per Bitcoin’s Fear & Greed Index. Source: alternative.me

According to CoinShares, BTC investment products saw US$45 million in inflows over seven days as assets under management fell to levels “seen during the lows in sentiment at the beginning of the year”.

Negative sentiment towards Ethereum contributed to outflows of US$12.5 million in the same period, bringing ETH outflows year-to-date to US$207 million, or 0.8 percent of assets under management.

Solana’s SOL the Sole Altcoin with ‘Substantial Inflows’

Last week, Ethereum rival Solana’s SOL was the “sole altcoin to see any substantial inflows”, totalling US$1.9 million.

With the price of bitcoin having shrunk more than one-third and the overall crypto market cap down by 38 percent, falling prices have led to unrealised losses for at least 40 percent of bitcoin investors.

Flying in the face of market gloom, the richest bitcoin whale splurged US$90 million on BTC in less than a month. Last week, blockchain intelligence platform IntoTheBlock disclosed that bitcoin whales collectively added to their holdings amid the crypto sell-off, with just over 50 percent of BTC holders still in profit.

Little over a month ago, US$250 billion was wiped from crypto’s market cap amid a welter of leveraged liquidations and general fear and uncertainty. After the storm comes the correction, as witnessed seven months ago when a US$840 million liquidity flush drained nearly US$400 billion from the market.

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Crypto News Cryptocurrency Law Terra

Luna Investors Apply for Seizure of Do Kwon’s Property in Class Action Lawsuit

A South Korean law firm is suing Terraform Labs founder and CEO Do Kwon over last week’s Terra collapse. The firm will also be filing warrants to seize Kwon’s property:

Investors Stand Against Do Kwon

Kwon and Terraform co-founder Daniel Shin are the subject of a class-action lawsuit from Seoul-based law firm LKB & Partners, filed in the wake of the Terra downfall, with possible criminal charges to follow:

There are related investors inside the law firm, and we will file a complaint against Kwon at the Financial Investigation Unit of the Seoul Metropolitan Police Agency.

Kim Hyeon-Kwon, partner, LKB & Partners

LKB & Partners will sue on behalf of the investors who have lost money because of the UST crash, with some of the impacted Terra employees set to join the suit. LKB & Partners will also file a police complaint and a bid to seize Do Kwon’s property as compensation.

Unfortunately for the Terraform Labs founders, multiple members of the company’s in-house law firm have resigned. While it remains unknown why these employees resigned at the beginning of the crash, it has left Do Kwon in a tough position.

What’s Happening with LUNA?

The news of the collapse of Terra has been hard to miss lately; however, this controversy is the outcome of the depegging of Terra USD (UST). Previously one of the largest stablecoins on the market, the resulting knock-on effects have been immense, including the sinking of LUNA and a negative impact on the DeFi industry.

Kwon has, however, proposed a revival plan for Terra. It constitutes a restart of the entire Terra blockchain and the distribution of one billion new tokens – a plan ex LUNAtics are highly opposed to.

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Bitcoin Crypto News Cryptocurrency Law Regulation Terra TerraUSD

UST Meltdown Spurs Global Warnings of Crypto Regulation

Unsurprisingly, the UST depegging fiasco has triggered regulators around the world to accelerate their efforts. While some persist in being hostile towards any regulation, others have expected it from the outset:


Regulators Seize the Opportunity Amid LUNA Debacle

When history is written, this past week may well be regarded as a watershed moment for the crypto sector as LUNA plunged 97 percent overnight.

To illustrate the extent of the carnage, consider that LUNA plummeted from an all-time high of US$119 in April to US$0.000143 at the time of writing. In addition, its sister not-so-stablecoin UST has completely depegged from the US dollar since May 9, currently trading at US$0.0901.

The LUNA collapse alone saw US$50 billion in market capitalisation erased in a week, leading crypto-sceptic regulators around the world to seize the opportunity to capture the narrative.

Regulations Incoming

With the market down US$500 billion in the past two weeks and with UST completely depegging from the US dollar, regulators’ initial focus has been on stablecoins.

In addition, crypto regulation has been placed on the agenda for the upcoming G7 summit in Germany, with French central banker Francois Villeroy de Galhau commenting:

What happened in the recent past [UST meltdown] is a wake-up call for the urgent need for global regulation.

Francois Villeroy de Galhau, governor, Bank of France

In the US, Securities and Exchange Commission chair Gary Gensler said on May 16 that “a lot [needs] to be done here, and in the meantime, the investing public is not that well-protected”, adding: “We’re going to continue to be a cop on the beat.”

Treasury secretary Janet Yellen also told told lawmakers last week that UST’s fate underscored the need for bank-like regulations to be imposed on stablecoin issuers. An anonymous official familiar with the matter added: “In the absence of congressional action, last week’s volatility will put regulators and stakeholders on a stronger footing if they feel the need to act alone to mitigate the risks.”

Shortly after, a non-partisan report by the Congressional Research Service echoed Washington’s sentiments, arguing that the stablecoin industry lacks the regulations found in traditional finance systems to safeguard investors. The overarching theme of the policy recommendations relates to transparency and disclosure.

Separating the Wheat from the Chaff

While regulation is not welcome by many, it appears all but inevitable that it will play an increased role going forward. It’s difficult to envision how a parallel system (ie, crypto) with little to no disclosure obligations can persist for long.

As exchanges like Coinbase face class action lawsuits for selling “unregistered securities”, it’s likely that most cryptocurrencies will find themselves falling within the parameters of increased regulation.

Not everyone is concerned, however, as Bitcoiners like Michael Saylor believe that everything outside of Bitcoin is an unregistered security.

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Australia Crypto News DeFi Terra Tokens

Australian Poll in March Predicted LUNA Would Top $143 This Year

Hindsight is a wonderful thing – in this case, the discovery of an Australian poll dating back to March that predicted the LUNA token would top US$143 this year.

‘LUNA Worth $390 by 2025’: Finder Survey

The crypto industry has proved its volatility lately as Terra fell and LUNA crashed. It was a crash, it seems, no one was expecting, not even the professionals. The Finder survey from March this year, for example, demonstrated the confidence that 36 fintech specialists had in Terra:

In late March to early April – prior to Terra (UST) losing its peg -Finder surveyed 36 fintech specialists for their thoughts on how LUNA [would] perform over the next decade. At the time, they thought Terra (LUNA) would be worth US$143 by the end of 2022 before rising to $390 by 2025.”

Finder.com

The biggest lesson to take out of this is that crypto is unfortunately still very unpredictable. While uncertainty still surrounds the future of LUNA and Terra, no token is exempt from the industry’s volatility and investors need to be smart, rather than taking predictions as gospel:

The LUNA Crash: Knock-On Effects

The LUNA collapse has had industry-wide knock-on effects. One of the most prominent outcomes has been significant falls across the DeFi market, as the crash was not restricted to the Terra ecosystem. With LUNA plummeting by 97 percent, there have now been approximately US$900 million worth of liquidations.

LUNA’s heartbroken founder, Do Kwon, has set to work on a revival plan, which is essentially a restart of the whole Terra blockchain. However, previous fans of LUNA are now struggling to trust the word of Kwon and are sceptical of the project’s return.

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Beefy Finance Crypto News DeFi Terra TerraUSD

Beefy Finance Token (BIFI) Spikes 168% Overnight, Benefits From Terra Collapse

BIFI, Beefy Finance’s native cryptocurrency, spiked 168 percent overnight after the protocol upgraded its network and capitalised on TerraUSD’s collapse.

After hitting a low of US$387.80 on May 14, the token is now trading at US$646.67 with 24-hour trading volume up 7 percent.

BIFI/USDT Chart: Source: coinmarketcap.com

BIFI’s price surge can be attributed to three important updates. According to recent tweets, Beefy Finance has upgraded its 12 stablecoin vaults to offer higher yields, added new options in its liquidity pools, and integrated with layer-1 protocol Oasis Network.

Taking Advantage of the UST Aftermath

A collapsing TerraUSD, alongside the 20 percent yield offered by Anchor Protocol for UST deposits, has allowed Beefy Finance to take advantage of the aftermath, introducing new options in liquidity pools and opening new vaults in an attempt to capture idle users and capital:

The integration with Oasis Network enables Beefy Finance to support numerous blockchains including Ethereum, Binance Smart Chain, Polygon, Matic, and more, making it one of the largest cross-chain protocols in existence.

The protocol also integrated Tron Network’s USDD stablecoin with a 62.5 percent APY (Annual Percentage Yield) for depositors on the quad stablecoin pool:

While the crypto market is experiencing one of the roughest months in its history, decentralised protocols like Beefy Finance are shedding some light on the industry. The opening of new vaults alone attracts fresh liquidity to the protocol by adding support to several assets from different blockchains.