Terra

Terra (LUNA) is a public blockchain protocol that emerged from Terra Classic. Due to limited liquidity, LUNA sell orders will not be accepted from 10:51 PM - 11:11 PM CT. Please submit your orders outside of this window.

On Thurs. May 25, Terraform Labs announced that the Terra community had approved the creation of a new blockchain, Luna 2.0. The creation of this new chain is a response to unprecedented volatility on the Luna 1.0 chain, which caused the price of the original LUNA and UST to collapse almost to zero. 

As part of the migration, the former asset LUNA will become Luna Classic, or LUNC. A portion of LUNA holders will be eligible to receive an airdrop of the new token (LUNA), per the terms outlined by Terraform Labs.

The new Terra blockchain will utilize the new LUNA, and will not include the UST stablecoin. 

On 9 May, after nearly 18 months of steadily holding its value against the US dollar, the so-called stablecoin TerraUSD (UST) became unpegged. The uncoupling triggered a cascade response that ultimately crashed UST and the Terra (LUNA).

TerraUSD (UST) is a stablecoin, which means it is a cryptocurrency pegged to a fiat currency. In this case, it is designed to be pegged to the US dollar. Stablecoins are intended to allow investors to hold crypto assets with less volatility, and trade a dollar equivalent without needing to cash out their positions. 

UST is considered an algorithmic stablecoin because instead of being backed by assets such as cash or cash equivalents, it is supported by on-chain code that facilitates a change in the supply and demand between UST and LUNA.

LUNA is the cryptocurrency that works in unison with UST in an effort to keep UST in 1:1 parity with the US dollar. One dollar of LUNA can always be converted at a 1:1 ratio to 1 UST. 

For example, if LUNA is trading at $10, then it can be redeemed for 10 UST, and 10 UST can be redeemed for 1 LUNA. If UST rises above its $1 peg to $1.01, then traders can swap 1 USD of LUNA for 1 UST. This trade burns 1 LUNA and mints 1 UST, which can then be sold for 1.01 USD. 

If UST rises to $1.02, then traders can sell for a 2 cent profit, and so on. 


In theory, increasing the supply of UST and lowering the supply of LUNA brings the price of UST back down until it reaches $1. Conversely, if UST drops below the $1 peg, then traders will be incentivized to buy 1 UST for 0.99 USD, which can then be swapped for 1 LUNA. 

This move burns UST and mints LUNA, sending UST higher towards the $1 peg.

UST lost its peg to the dollar starting on May 8th following large withdrawals of UST from Terra’s DeFi protocol Anchor. UST fell quickly, and struggled to regain its peg because the burning of UST and minting of LUNA couldn’t keep up. 

UST descended rapidly as the prolonged de-pegging led to uncertainty and a snowball effect of larger withdrawals. 


A significant share of circulating UST was locked on Anchor, a Terra-based lending and borrowing protocol that paid users 19.5% to stake UST. 

The LFG used up about $2.9 billion of its bitcoin reserves in an unsuccessful attempt to revive UST. 

WSJ 
Decrypt 
Bloomberg

*This content is for educational purposes and is not investment advice.

Luna Classic (Former Terra)

Terraform Labs founder Do Kwon has been sentenced to four months in prison by a Montenegro court for using a false passport.

Terraform Labs Founder Do Kwon Sentenced to Four Months Jail

Montenegro's court has determined that Do Kwon, the co-founder of Terraform Labs, is guilty of using a counterfeit Costa Rican passport. As a result, he has been sentenced to four months in jail for the offense.

Terra's Do Kwon Receives 4-Month Jail Sentence in Montenegro for Counterfeit Passport Usage

A court in Montenegro has sentenced cryptocurrency entrepreneur Do Kwon, who is charged in the U.S. with a multibillion-dollar

Montenegro court jails 'cryptocurrency king' Do Kwon for four months - media

A Montenegro court handed down prison sentences to Do Kwon, founder of the Terra (CRYPTO: LUNA) blockchain, and Terra executive Han Chang-Joon for attempting to flee the country using counterfeit Costa Rican passports. The incident, which took place in March, saw the duo trying to board a private jet.

Do Kwon Sentenced To Prison In Montenegro After Attempting To Flee Country: Extradition Could Come Next

The court has also ordered the confiscation of two Costa Rican passports, two Belgian passports and two identity cards belonging to Kwon and fellow Terra executive Han Chang-Joon.

Do Kwon Sentenced to 4 Months Jail in Montenegro Document Forgery Case

Do Kwon has been found guilty of using a fake passport in an attempt to leave Montenegro in March. He was sentenced to four months in jail.

Do Kwon found guilty in Montenegro fake passport case

Terraform Labs' CEO Do Kwon told a court in Montenegro he never had any intentions of forging his travel documents.

Terra Co-Founder Do Kwon Denies Forged Passport Allegations

A judge in the United States considered on Thursday whether the cryptocurrencies created by Terraform Labs were securities. The failed blockchain firm and its founder, Do Kwon, have asked the court to dismiss a case filed by the U.S. Securities and Exchange Commission (SEC) alleging that they defrauded investors whom they sold unregistered securities.

US Judge Considers if Crashed Coins of Terraform Labs Were Securities

Terra founder Do Kwon refuted allegations of possessing a counterfeit passport during a court session in Montenegro, claiming that the Costa Rican passport in question was procured via a Singapore agency. In the court, Kwon was quoted as, “We applied for these passports through an agency recommended to me by friends whom I respect.

Spy Movie In Real Life: How Terra Founder Do Kwon's Golden Passport Scheme Crashed And Burned

Do Kwon, a co-founder of Terraform Labs, will be taken into extradition custody in Montenegro for up to six months.

Terraform Labs Co-Founder Do Kwon to Be Taken Into Extradition Custody

Was UST a security because it was designed for practical uses rather than as an investment?

U.S. Court Will Rule on Terraform Labs' Push to Dismiss SEC Lawsuit Within a Month

A U.S. judge considered whether the digital assets created by Terraform Labs were securities at a hearing on Thursday, a question central to the U.S. Securities and Exchange Commission's fraud case against the company and its founder Do Kwon.

U.S. judge considers whether Terraform Labs' cryptocurrencies were securities

Courts in the country approved bail for the Terraform Labs founder, but a South Korea extradition request is set to keep him in jail.

Do Kwon to Remain in Custody While Montenegro Courts Consider Extradition Request: Report

A court in Montenegro has extended the incarceration of former crypto fugitive Do Kwon and his associate Han Chang-Joon for an additional six months while they consider an extradition request from South Korean prosecutors. The decision comes after a higher court in Podgorica allowed Kwon and Han to be released on 400,000 euros ($438,000) bail each, local outlet RFE

Terra Founder Do Kwon's Incarceration Extended By Montenegro Court

Disgraced Terra (LUNA) founder Do Kwon reportedly relocated tens of millions of dollars worth of crypto away from a Luna Foundation Guard wallet after his arrest in March.

Terra Founder Do Kwon Allegedly Moved $29,000,000 in Crypto Away From Luna Foundation Guard After Arrest: Report

Founder of Terraform Labs, Do Kwon, has withdrawn millions of dollars in crypto from an entity linked to his failed blockchain firm, investigators claim. South Korean authorities are now trying to locate the digital assets that have been allegedly transferred since his arrest in Montenegro in March.

Do Kwon Moved $29 Million Worth of Coins Since Arrest, Prosecutor Says

Terra co-founder Do Kwon allegedly had financial relations with the leader of a political party in Montenegro.

Do Kwon Claims to Have Backed Political Party in Montenegro: Report

The Podgorica district court in Montenegro has dismissed an appeal by the State Prosecutor's office against the bail of Do Kwon

Appeal Against Terraform Labs Co-Founder Do Kwon's Bail Terms Dismissed in Montenegro

Terra (CRYPTO: LUNA) founder Do Kwon's bail request has been approved by the Montenegro court, following the annulment of a previous approval by a higher court. Kwon, along with former Terra executive Han Chang-joon, was arrested in Montenegro in March for allegedly attempting to travel with forged documents.

Montenegro Court Delivers Shocking Twist In Terra Founder Do Kwon's Forgery Case

After denying his bail request, the Montenegro High Court has granted Kwon police-enforced house arrest until his court date on June 16.

Do Kwon's Bail Approved After Property Verified to Be 'Worth Millions'

A previous approval was annulled by a higher court after it was determined the Terra founder's finances were not sufficiently assessed in the first decision.

Do Kwon's $428K Bail Request in Fake Passport Case Approved by Montenegro Court

A lower court had determined the value of Kwon's property based on "statements" and not concrete evidence, a high court cited in a decision to scrap his bail approval.

Do Kwon's Detention in Montenegro Extended After High Court Decision to Revoke Bail

Do Kwon, the former head of Terraform Labs and the creator of the failed TerraUSD stablecoin, is back in custody in Montenegro after a higher court revoked his bail of 800,000 euros.

Terraform Labs Co-Founder Do Kwon's Bail Revoked

A Montenegrin high court judge has reportedly invalidated the bail application of Do Kwon, the co-founder of Terraform Labs. Kwon was detained for providing false identification while boarding a flight to Dubai alongside a companion on March 23, 2023.

Terraform Labs CEO Do Kwon Denied Bail by Montenegrin High Court; Extradition Requests Loom

A court in Montenegro overturned a prior ruling that granted bail to ex-crypto titan and co-founder of Terraform Labs, Do Kwon. The high court's decision, which took place in Montenegro's capital of Podgorica, meant Kwon would continue to be held in custody, Bloomberg quoted court spokeswoman Marija Rakovic as saying.

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