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DeFi and Credit Risk
The LUNC community is happy that the Terra Luna Classic (LUNC) token might be coming back, but Do Kwon, the founder of Terraform Labs, is now wanted for arrest by South Korean authorities.
A court in Seoul is said to have issued an arrest warrant for Kwon and five other people, all of whom are now in Singapore. The South Korean prosecutor's office says that the founder of Terra may have broken the country's capital markets law.
In May, what the Terra community thought was a FUD attack turned out to be one of the worst market crashes in crypto history. Investors of Terra USD (UST), now called Terra Classic USD (USTC), and Terra (LUNA), now called Terra Luna Classic (TLUC), lost millions of dollars worth of assets (LUNC). The UST stablecoin started to move away from its dollar peg. In June, it fell to a new low of $0.006, which was the lowest it had ever been.
Aside from UST, LUNA, an asset that once peaked at $119.18 and fell to an all-time low of $0.0000009 in April, caused the project's Reddit community to be linked to suicide hotlines.
Several decentralized finance (DeFi) protocols were also hurt by the Terra crash, which caused projects connected to the stablecoin to drop by 80% or more.
On August 17, Kwon hired lawyers from a South Korean law firm. This was just a few days after he said that the police hadn't contacted him yet. A report says that the founder of Terra gave a letter of appointment to the department in charge of looking into why Terra failed.
On August 16, the founder of Terra broke his silence to try to clear his name of a number of claims. Despite Kwon's efforts, community members still criticized Terra's CEO, comparing his situation to that of the creator of Tornado Cash, who was arrested for writing a privacy code.
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