LUNA crashes 30% as Seoul court issues warrant for the arrest of Do Kwon

LUNC (Terra classic) has also dropped 18% over the last 24 hours.
LUNA crashes 30% as Seoul court issues warrant for the arrest of Do Kwon

A court in Seoul has issued a warrant for the arrest of Do Kwon, the co-founder of Terra. He is to be arrested alongside five other people.

Do Kwon was accused of withdrawing large sums of money from the Terra ecosystem to $2.7 billion before the system collapsed in May. However, Kwon posted on his social media account that his only source of income over the last two years has been the salary he received from Terraform Labs.

Back in May, Terra USD (UST) de-pegged from the dollar, causing LUNA (Terra’s native token, now LUNC) to become over-inflated, rendering it worthless.

During that period, Kwon and critical players in the community made some decisions to control the situation, but they proved abortive.

They wanted to solve the problem of large UST withdrawals using a slow-burning mechanism. During the period, there were massive Terra UST withdrawals, adding to the issues that Terraforms Labs faced.

The warrant is connected to a violation of capital market regulations, and it is believed that Do Kwon and his team deceived investors into buying Terra tokens at an inflated price. 

Since the incident, Do Kwon and other developers of Terraform Labs have been under investigation by South Korean regulatory institutions. There has been more than one allegation laid against them by legal firms and individuals.

Do Kwon stated in an interview that he also lost everything and went on to debunk all the fraud allegations against him. He also expressed his belief in the development of Terra 2.0.

LUNA price crashes

LUNA has been enjoying good momentum over the last few days outperforming Bitcoin and Ethereum in the process. However, it has since dropped by more than 30% over the last 24 hours. The price of LUNA currently sits at $3.06

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LUNA 7-day chart – Source: CoinMarketCap

LUNC follows

LUNC (Terra classic) was quick to follow with a drop of 18% over the last 24 hours. The price of LUNC currently sits at $0.0002978

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LUNC 7-day chart – Source: CoinMarketCap

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Audu Buba
Audu Buba
Audu is a journalist passionate about blockchain technology, NFTs, and the metaverse.