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In the cryptocurrency industry, the catastrophic collapse of LUNA by 99.9999 percent and the depeg of UST by Do Kwon have caused enormous tremors and irreparably undermined the public’s belief in “algorithmic stable coins”.
After ten days, a pattern is beginning to develop in the aftermath of this historic occurrence.
A case against CEO, Do Kwon, will be brought by the government of South Korea.
Do Kwon, the owner of Terra Labs in South Korea, has moved to dissolve the company just days before the depeg.
On April 30th, shareholders voted to dissolve both the Busan and Seoul offices, and Do Kwon was named liquidator on May 4th and 6th, respectively.
Do Kwon’s prior knowledge of the crash is unknown at this time, but the timing of his decisions seems suspect in light of the catastrophic incident that occurred only 5 days after his initial decision.
In that case, you’ll be relieved to know that those who designed this escape strategy were unsuccessful.
YNA reported that the Seoul Southern District Prosecutors’ Office has declared the beginning of an official inquiry into Terra Labs and Do Kwon.
As a result of complaints filed by Korean crypto investors, who accused Do Kwon of fraud and other financial breaches, the decision was made to shut down the company.
According to Jin Woo, a Korean reporter, Do Kwon is also facing a $78 million tax punishment for avoiding corporation and income tax payments.
Will the Terra Luna ecosystem survive
LUNA seemed to have stabilized and traded between $0.0001 and $0.0003 for the last 10 days following the fall. Terra’s recovery strategy’s effectiveness is still up in the air. In the aftermath of the crash, the organization appears to be eager to construct a new chain and distribute 1,000,000,000 of a new token (nLUNA).
UST has been abandoned and is currently trading at $0.066. The only thing that keeps the asset moving is speculative trading, which acts like vultures scavenging a carcass.
No UST reserves could be burned due to Terra’s plans.
Terra validators just voted to destroy the remaining UST reserves in the treasury in order to rectify the coin’s trajectory. The code that was intended to do this was attempting to burn more UST than the Treasury actually had.
It is evident that no good option was made by the Terra team to attempt to limit the damage that their system has produced for any investors or even to itself.
Terra only stopped producing LUNA after exchanges began to cut off the token’s supply, preventing it from consuming any more money.
There is no doubt that the CEO is dishonest, arrogant, and unable to work with other exchanges to fix this problem.
If Do Kwon was aware of the crash before dissolving Terra Korea, additional information will be forthcoming.
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