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South Korea's Crypto Industry Emerges from Terra Luna's Shadow as Justice is Pursued for Do Kwon

Do Kwon of Terra claims he is not 'on the run'

FatManTerra, the Dark Knight of Terra, has reported yet another exploit inside the Terra ecosystem. Due to a glitch with the price oracle for Luna Classic, more than $2 million had been taken from the Terran decentralized exchange Mirror Protocol.

Early on May 31, the oracle issue affected additional applications such as CoinStats. LUNC was listed as $8 per token instead of $0.00013 when LUNC owners awoke and checked their portfolios, revealing a 6,153,750 percent rise.

However, the aesthetic issue was far less significant than the Mirror Protocol issue. The mismatch enabled an attacker to get a loan using trivial quantities of LUNC as collateral and subsequently withdraw tokens such as "mBTC, mETH, mDOT, and mGLXY," whose liquidity pools were completely depleted.

FatManTerra issued a call to action early on May 31, requesting Mirror Protocol to correct the pricing oracle before to the opening of U.S. markets. Mirror also housed tokenized copies of U.S. equities such as $SPY, $AAPL, and $AMZN, which posed a risk once they became traded.

FatManTerra captured a screenshot of the tokenized securities before to the opening of the markets and "moments before calamity."

However, there appears to have been an intervention, as liquidity on Mirror Protocol has stayed intact. The tweet of FatManTerra read:

Crisis averted – in the nick of time, Mirror disabled the usage of mBTC, mETH, mGLXY and mDOT as collateral. The attacker can no longer use his ill-gotten endowment to drain the rest of the pools. Great job @mirror_protocol – thank you!

As a result of the announcement, Mirror's native MIR token is down 20% today as investors withdraw tokens out of concern of losing assets to the exploit. In addition, mirror.finance appears to be offline as of May 31, 15:00 UTC, indicating that the program may still be experiencing issues.

 

How did this come about?

The problem stems from the decision to release LUNA 2.0 as soon as feasible. With less than two weeks between the attack and the introduction of LUNA 2.0, anybody might have guessed that hurrying would have severe consequences.

ChainLinkGod commented:

"This should have been well anticipated when the decision was made to rebrand the original LUNA token to LUNC”

Unquestionably, the choice to rebrand the historical LUNA token as LUNC and give the new chain the old ticket, $LUNA, is the leading cause of this situation. Without the right network reference, any code that references the ticker would return inaccurate data.

$LUNC operates on the "columbus-5" network, whereas $LUNA operates on "phoenix-1." To add to the complexity, each coin on the Ethereum network has a contract address; Wrapped Luna Classic $LUNC is "0xd2877702675e6cEb975b4A1Fffb7BAF4C91ea9," but $LUNA has no wrapped token on Ethereum at this time. In the following weeks, it is anticipated that further migration-related concerns may surface.

FatManTerra leaked a chat between Do Kwon and Terra validators that stated,

“the most important thing is to get something launched

it almost doesn’t matter how one designs it

we lose community every day we delay”

This message demonstrates that Do Kwon's sole objective was to restart Luna. He seemed unconcerned about the quality of the new blockchain; he wanted it to go online. Only three days have passed, thus it is not surprising that substantial problems have already arisen.

Even after TerraUSD's demise, Do Kwon's hubris continues to influence users, putting investor confidence in the crypto sector at danger. In response to the news and in a threatening post, FatManTerra tweeted,

We have reached out to FatManTerra to confirm our sources and provide the most current and accurate content available. He acknowledged to us in private that he does not work inside the Terra environment, but that he is committed to pursuing justice for people who, like himself, have suffered so much loss.