South Korea Issues Arrest Warrant For Terra Co-Founder Do Kwon, LUNA Price Sees Massive Crash

LUNA price saw a drastic dip of nearly 35 percent following the news of Do Kwon's arrest warrant.

The LUNA crash wiped out nearly $40 billion of investors’ money in May.

Source : Getty

Do Kwon, the founder of Terra blockchain creator Terraform Labs, faces an arrest warrant issued by South Korean authorities. The two primary crypto coins of the Terra network — LUNA and TerraUSD — saw a massive crash in May this year, leading to an unprecedented bloodbath in the crypto market, wiping out nearly $40 billion of investors’ money in a matter of days. The crash led to investors accusing Kwon of fraud, which has now led to the issuance of an arrest warrant.

South Korean prosecutors said in a statement that an arrest warrant has been issued for six individuals including Do Kwon, who is said to be residing in Singapore at present.

Terra crash: What really happened?

The Terra ecosystem adopted TerraUSD (UST) as its stablecoin, which lead to a direct interlinking of LUNA and UST. UST is a stablecoin pegged 1:1 to the US dollar. Its de-pegging (losing dollar value) in May led to LUNA losing almost all its value, trading at 97 percent below its all-time peak of $118, as seen in April.

However, a revival plan was put into place by Do Kwon. Following the crash, the Life Foundation Guard (LFG) of Terra deployed resources of around $1.5 billion to help stabilise LUNA. However, it failed to achieve its goal na hence, Revival Plan 2 was announced by Kwon. As per the plan, the current Terra blockchain was “forked” into a new one, without using the UST stablecoin mechanism as before. While the older blockchain is now called Terra Classic (LUNC), the new blockchain is dubbed Terra (LUNA).

LUNA price today (September 15)

Following the news of the arrest warrant being issued, LUNA price fell massively in the last 24 hours. As per CoinMarketCap data, Luna price currently stands at $2.88, seeing a drastic 24-hour dip of 34.07 percent. 

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