Around the beginning of the summer, LUNA crashed from a position of over $100.00 to pennies in a matter of hours. The LUNA crash was prompted by the depegging of their stablecoin USD. Around that time, a lot of investors including myself were trying to talk the blockchain eco team into saving the token.
At that time, the founder Do Kwon and his team were adding trillions of tokens to the circulation, which pretty much killed any hope of LUNA being able to recover. There were multiple plans being offered by the community and even by the Binance founder Changpeng Zhao. The first idea was to burn the newly created LUNA tokens, but the problem was the number of tokens. With the new amount being in the trillions, there was no real way, a burn would work.
Keep in mind, that circulation with crypto is everything.
Rumors soon started to come to the surface about the moments before the LUNA crash. It was said that Do Kwon knew about the upcoming crash and offered information to help get some of the investors to cash out before the bulk of the investors were screwed. As new investors entered the community trying to help soften the blow, Do Kwon started to mint new tokens. Sadly, efforts fell by the wayside, and people started to ask about LUNA’s Bitcoin reserve.
After several tweets with the Binance owner, Do Kwon stated that they couldn’t use the reserve. He insisted that he used it to stabilize the USD stablecoin. However, things still didn’t add up. Investigations were called from multiple places and now South Korea has issued an Arrest Warrant according to https://watcher.guru/news/terra-south-korea-issues-arrest-warrant-against-do-kwon.
Due to the ongoing legal issues both LUNC which was the old LUNA and the new LUNA are both dipping in price. People are probably jumping because they do not want a repeat of May. In crypto, trust is perhaps the biggest factor when it comes to investing. If you cannot trust the project or the dev team, it’s hard to feel good about putting your money into their project.
There are questions about the handling of LUNA. Why did Kwon use all his Bitcoin, did he use it to try to save the project, and why did he add trillions of LUNA when people were trying to save the project by investing? Maybe South Korea will be able to get some real answers because most of us would like to know what happened to LUNA!
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