Many of you know the impact of Luna (now Luna Classic LUNC) on the global cryptocurrency market over the past month.
Kwon Do-hyung, CEO of Terraform Labs, who is responsible for the situation, was criticized for issuing a new Luna (Luna 2.0) even before the situation was settled. The news is that the price has plunged to 1/10th in just 10 days since the release of Luna 2.0.
Over the past month, the LUNC has failed, affecting not only the global cryptocurrency market, but also the economy as a whole, and the government movements of each country. Even “Luna 2.0,” which was issued despite concerns with this follow-up coin, is following in the footsteps of Luna 1.0, 10 days after it was listed.
Luna 2.0, which was listed on cryptocurrency exchanges around the world on the 28th of last month, saw its price cut by one-tenth in just 10 days.
Kwon Do-hyung, CEO of Terraform Labs, who sought to make a comeback with Luna 2.0, actively promoted it with a Twitter account and answered user questions when listing Luna 2.0. Currently, we have closed our Twitter account again.
The price, which was close to $20 at the time of listing, once fell to $1.71. It’s down more than a tenth. It’s now priced at around three dollars. 바이낸스 거래소 According to data from Coin publisher Terraform Labs, Luna 2.0’s market capitalization once fell below $500 million (about 620 billion won), and transactions in the past 24 hours have surpassed the market capitalization.
The original Luna (LUNC), issued by Terraform Labs, collapsed in an instant on May 10 when TerraUSD (UST), which moved the Terra ecosystem together, began to depreciate below the dollar originally supposed to be fixed. UST, an algorithm-based stable coin, failed to overcome the limitation of lack of collateral and crashed with Luna Coin as the market moved.
As a result, major futures exchanges and domestic exchanges around the world delisted Luna.
However, Terraform Labs issued Luna 2.0, despite criticism. This was intended to recover some of the damage from Luna 1.0 by giving free air drops (grants) to those affected by Luna 1.0. However, if you look at the content, there were many words that it was Luna 2.0 only for whales because it was an advantageous allocation method only for investors (aka whales) who had a lot of Luna 1.0. Nevertheless, CEO Kwon carried out the Luna 2.0 listing.
They even contacted domestic exchanges to ask if they were listed. Later, he listed Luna 2.0 on each futures exchange and actively promoted it on his Twitter account.
Currently, it is not clear why CEO Kwon Do-hyung turned Twitter into private. It is widely speculated that he closed it for fear of mocking and criticizing comments online.
New York State moves to tighten regulations on stable coins
New York State, the center of U.S. finance, has decided to tighten regulations on stable coins, including Luna.
The New York State Department of Financial Services (DFS), which is responsible for regulations, has announced a new regulation that requires cryptocurrency operators that issue stable coins to be audited monthly and to maintain their reserves at all times.
According to the guidelines of the Ministry of Financial Services, stable coin issuers must always maintain their reserves and exchange them if investors want. The guidelines also said that the reserves prepared by cryptocurrency operators and the assets held by coin issuers themselves should be distinguished.
Coin issuers are also required to receive monthly regular audits from separate CPAs and submit the results to the state authorities.
This regulation is for companies with bit-licence, a license for cryptocurrency business in New York State. These companies have to keep legal currency like dollars as reserves.
State authorities intend to make the rules on stable coin operations and reserves more transparent through this measure. However, as New York State’s regulations become stronger, there are concerns that virtual currency or blockchain-related companies and talents could move to other states in the U.S.
Kwon Do-hyung, we don’t know where he is
On the other hand, a local media outlet reported that neither Terraform Labs headquarters, which was established in Singapore, nor Terra Foundation Guard (TFG), which manages funds, were found to be real, shocking.
Obviously, when reporters visited the building that had been registered for more than two years, there were completely unrelated companies moving in, and the period when these companies moved in was before Terra-related companies were registered.
In short, Kwon Do-hyung’s Terra Foundation has never been established as an offline company.
The establishment registration of Terraform Labs in Korea has already been disbanded a few months ago.
Currently, Kwon Do-hyung’s whereabouts are likely not even in Singapore, and the theory that he fled to Dubai is gaining momentum.
As shown in the case of Luna 2.0, CEO Kwon Do-hyung denies all charges and even closes the communication window if he is disadvantaged. The location is also unclear.
Currently, investigative agencies in Singapore, the U.S., and Korea have launched investigations into Kwon Do-hyung. Angry investors from each country are also continuing to file complaints.
Kwon Do-hyung is already known to have cashed in nearly a trillion won a few months ago
Also, according to the testimony of a worker who worked at the Terra Foundation, Kwon Do-hyung had already sold nearly 1 trillion won of the foundation’s reserves and cashed them in months before the Luna incident.
According to the U.S. Securities and Exchange Commission (SEC), Kwon Do-hyung had more than $80 million in cash every month with dozens of cryptocurrency wallets in the months before the Tera Foundation collapsed.
In various circumstances, I think CEO Kwon Do-hyung is more of a fraud than an entrepreneur. Luna was a coin that grew into a system that would give her 20% interest if she left her money without collateral, and when this failed, she issued Luna 2.0 without collateral again, causing the price to plunge to 1/10. And it turns out that for years, the office in Singapore didn’t even exist in the first place.
Investors are mocking this and laughing at the failure of Luna 2.0, saying they will issue Luna 3.0, 4.0.
In reality, there is little possibility of imprisonment under the current relevant laws. Still, I think that the person who damaged many investors continues to pretend to be a good employee and is engaged in a second fraud in the name of rescuing the victims.
If the sentence is not served, I hope that even part of the astronomical investor’s damage must be collected with fines.