Summary: Seven cryptocurrency exchanges in South Korea have been raided by prosecutors seeking any information regarding the Terraform Labs collapse, according to a Yonhap News Agency report. Bithumb, Upbit, Coinone, four local exchanges and eight residential office addresses have been searched for information, the report said. The Terra Network started its infamous downfall on May 9, ...
The Terra Network started its infamous downfall on May 9, which saw its two highly-esteemed cryptocurrencies, UST and LUNA, drop in value by more than 99% in the course of a week. This shocked the crypto world, which immediately demanded answers.
Two months later, South Korea is investigating Terraform Labs and Do Kwon, who many believe is guilty for intentionally causing the collapse of UST and LUNA.
Shortly after the collapse of the network, Korean police positioned themselves to freeze Terraform Labs assets to prevent the company from embezzling funds. While prosecutors, governments and even civilians alike have started to conduct their own research regarding Terraform Labs and Kwon, Kwon is onto a new project: Terra2.0.
Essentially, Terra created a new Terra chain, but left out the algorithmic stablecoin. While the new chain will keep the old name, the old chain will be called Terra Classic. In addition, both coins that crashed have now been rebranded to feature “classic” in their name. LUNA changed to LUNA classic (LUNC) and UST was renamed TerraClassic USD (USTC).
LUNA, the new cryptocurrency featuring the same name as the pre-crash coin, is currently trading at $2.03, which is down considerably from its all-time high of just over $14, according to Bitpush Terminal data.
The Terra network collapse has caused a wide-reaching and devastating domino effect across the industry. Companies that were exposed to Kwon’s creation are now experiencing tremendous insolvency issues or even bankruptcy. Three Arrows Capital, a crypto-based hedge fund, is one of these companies that eventually declared bankruptcy after being exposed to the Terra Network.
Not only is the crypto space experiencing the ramifications of the UST and LUNA downfall, but it’s also dealing with the effects that companies exposed to UST and LUNA are experiencing. In other words, the industry is battling the Terra collapse and the collapse of other companies exposed to the Terra Network.
Author: Tyler Irvin