Luna Crypto - Its Collapse, Missing Founder And Everything In Between
The collapse of the esteemed Luna crypto not only surprised investors, several of them were aghast as they lost millions of dollars. The total money wiped out amounted to billions. While some asked if Luna would still bounce back, others expressed concern how the crash would dent crypto investments. The authorities, however, are busy hunting down Luna’s co-founders.
With approximately $60 billion gone as Luna cryptocollapsed, it’s impossible for the world of cryptocurrency not to feel the impact.
To further complicate matters, one of its co-founders, the South Korean computer scientist and cryptocurrency developer Do Kwon, is currently wanted by the authorities.
Along with TerraUSD, Terraform Labs, headquartered in Singapore, held the crypto coin, Luna.
According to Forbes, it took only four years for Kwon and his Terra network to establish a reputable status in the crypto world. However, the fame didn’t last.
At the time of this writing, the collapse of the Luna crypto network - a lost worth a staggering $60 billion - remains to be the biggest crypto crash so far.
What happened to Luna? Also, is Do Kwon in hiding?
To make things clear, Forbes pointed out that the incident concerning Luna crypto involves two coins, namely, TerraUSD (Terra U.S. Dollar or UST) and Luna (stylized as LUNA).
Do Kwon and investor and e-commerce expert Daniel Shin co-founded the fintechcompany Terraform Labs in 2018. It created the blockchain network called Terra.
It’s just like the Bitcoin network and the Ethereum network.
Two gold Bitcoins and one gold Ethereum on top a Bitcoin
TerraUSD (UST) and Luna both belong to the Terra network. Terra created the Luna coins and TerraUSD (UST) serves as its “algorithmic stablecoin.”
Terraform Labs launched TerraUSD (UST) in 2018; Luna, in 2019.
In April 2022, the price of a Luna coin was $116. Before Luna crypto was removed from the list in different crypto platforms, its price registered at $0.01.
Tracing its humble beginnings, back in 2021, a Luna coin was only worth less than a dollar. Eventually, its value soared and just within a year, several crypto investors earned millions from it.
As the Luna crypto gained prominence, so did Do Kwon (over a million Twitter followers).
The media would report about ordinary people becoming rich because of its success. Consequently, some crypto investors placed Kwon on a high pedestal, earning him a “cult hero status,” as Forbes put it.
After the Luna crypto collapsed, per CoinMarketCap, its market capitalization as of August 2021 was $6 billion.
In a nutshell, according to Forbes, TerraUSD (UST) encountered a problem. Since Luna is connected to it, the problem led to the Luna crypto crash.
On May 7, 2022, TerraUSD (UST) was taken - “unstaked” is the crypto term for it - from Anchor Protocol (ANC), which is built on the Terra blockchain.
The estimated total value of the TerraUSD (UST) taken was more than $2 billion. After the unstaking, hundreds of millions of dollars’ worth of TerraUSD (UST) were liquidated.
There were two arguments presented as to why the unstaking was done, which ultimately led to the Luna crypto crash:
interest rates continued to increase
the Terra blockchain got attacked
Then these two happened:
“„
The huge sell-offs brought down the price of UST to $0.91, from $1. As a result, traders started to change 90 cents worth of UST for $1 of Luna.- Forbes
Panic ensued and investors started selling TerraUSD (UST). As more TerraUSD (UST) were sold, more Luna tokens were minted. As a result, the latter’s circulation rose.
Then came the collapse of the Luna crypto. Crypto exchanges reacted by removing TerraUSD (UST) and Luna from their list.
Terra Luna logo, with Luna crypto founders Daniel Shin and Do Kwon seated on a couch, with legs crossed
In any kind of cryptocurrency crash, more so for such a massive scale like the Luna crypto crash, it would only be natural to look for the leader or president/CEO.
Do Kwon, who, based on various reports, was nowhere to be found since the collapse. He is currently branded a fugitive.
Channel News Asia reported that the Seoul Southern District Prosecutors’ Office already contacted the Interpol (the International Criminal Police Organization from France) for assistance.
Kwon is now under Interpol’s “red notice.” If he happens to be in any of the organization’s 195 member states, the police force in any of those countries can arrest him.
He and five more Terraform Labs employees will undergo trial in a South Korean court for fraud and other charges in connection to the Luna crypto crash.
Do Kwon in gray long sleeve shirt with arms stretched behind his head while lying on a couch