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)

NEW YORK – Lawyers for the U.S. Securities and Exchange Commission (SEC) rested their case against Terraform Labs and its co-founder, Do Kwon, on Friday, releasing a New York jury to decide whether Kwon and his company are liable for allegedly misleading investors about the stability of Terra USD (UST) and its integration with a Korean mobile payments app.

Jury Begins Deliberations in Civil Fraud Case Against Do Kwon, Terraform Labs

The legal battle surrounding Do Kwon, co-founder of Terraform Labs, has taken another turn, with Montenegro's Supreme Court having thrown a wrench into the extradition process, cancelling a lower court's decision to send the beleaguered co-founder to South Korea. What Happened: The crux of the issue lies in a procedural error.

Do Kwon's Extradition Saga Takes A Twist, As Montenegro Supreme Court Overturns Ruling

In the latest Montenegro Supreme State Prosecutor's Office's announcement, the legal proceedings concerning the extradition of Terraform Labs' former CEO, Do Kwon, will revert to the first trial court.

Ex-Terraform Labs CEO Do Kwon's Extradition Case Reset

The Supreme Court of Montenegro overturned a decision made by the lower courts concerning the extradition of Do Kwon.

Montenegro Supreme Court overturns decision on Do Kwon's extradition as NY civil case continues

Attorneys for Terraform Labs and its founder Do Kwon are expected to give closing arguments on Friday at a trial on claims that Terraform and Kwon defrauded investors before the collapse of their stablecoin shocked cryptocurrency markets in 2022.

Terraform Labs to make final pitch to jury as civil fraud trial wraps

The ongoing trial involving Terraform Labs, the company behind the algorithmic stablecoin UST (CRYPTO: USTC), took a dramatic turn on Monday with the testimony of James Hunsaker, a former employee of Jump Trading. According to a series of social media posts by journalist Alexander Osipovich, Hunsaker's testimony centered around his claim that Jump Trading colluded with Terraform Labs to manipulate the price of UST.

Trading Firm Allegedly Colludes With Do Kwon's Terra, Making $1B Before Peg Collapsed: Testimony

Terraform Labs co-founder Do Kwon has been released from prison in Montenegro as the Balkan country's Supreme Court weighs competing extradition requests from the U.S. and South Korea.

Do Kwon Released From Montenegrin Prison on Bail; Terraform Labs' Civil Trial Begins in NYC

Terraform Labs and its founder Do Kwon are set to face trial on Monday in Manhattan on a regulator's claim that they lied to investors before the collapse of two of the company's cryptocurrencies, which roiled markets in 2022.

Terraform Labs' civil fraud trial set to begin in New York

Former Terra CEO Do Kwon also had his passport confiscated as he ended his prison term on March 23 in Montenegro.

Do Kwon awaits final extradition call in foreigner camp in Montenegro: report

Multiple sources have reported that Do Kwon, the ex-chief executive officer of Terraform Labs, was set free from jail on Saturday while the high court in Montenegro decides on two separate extradition requests submitted by South Korea and the United States.

Do Kwon Out of Jail, Under House Arrest Pending Extradition Decision

The Supreme Court of Montenegro is postponing the extradition of disgraced Terra (LUNA) founder Do Kwon to South Korea.

Montenegrin Supreme Court Postpones Terra Founder Do Kwon's South Korean Extradition

Do Kwon, Terraform's co-founder, is to be released from prison in Montenegro but will in the country for now due to global criminal charges.

Do Kwon to be released from jail, remain in Montenegro

Montenegro's Supreme Court placed a pause on Terra founder Do Kwon's pending extradition from the Balkan country, issuing an order on Friday that overturns earlier decisions from two lower courts to extradite Kwon to his native South Korea.

Do Kwon's Extradition to South Korea Postponed by Montenegrin Supreme Court

An appellate court in Montenegro has stopped the extradition over “significant violations of the provisions of criminal procedure."

Terra Co-Founder Do Kwon's Extradition to South Korea Is in Limbo

Montenegro's Supreme State Prosecutor's Office said the court's decision to extradite Do Kwon to South Korea overstepped its authority.

Montenegro's top prosecutor contests Do Kwon's South Korea extradition

Terraform Labs co-founder Do Kwon's pending extradition to South Korea has apparently been put on ice following a legal challenge issued Thursday by Montenegro's top prosecutor.

Do Kwon's South Korea Extradition Uncertain After Challenge from Top Prosecutor

Do Kwon will be heading to his home country this time.

Do Kwon to Be Extradited to South Korea—This Time for Real

The court made the decision based on South Korea placing the extradition request before the United States and other relevant legal criteria.

Montenegro Appellate Court rejects Do Kwon's appeal of South Korean extradition

The U.S. is also seeking Kwon's extradition despite the Montenegrin court's decision to send him to South Korea.

Do Kwon Appeal of South Korea Extradition Rejected by Montenegro Court

A U.S. court has allowed Terraform Labs to hire law firm Dentons to defend the company in a lawsuit brought against it by the U.S. Securities & Exchange Commission (SEC) in Jan. 2024.

Terraform Labs Allowed to Hire Law Firm Dentons In Bankruptcy Case by U.S. Court: Reuters

Despite Montenegro's High Court ruling for Do Kwon's extradition to South Korea, the U.S. is not backing down.

US Continues Efforts to Extradite Terra Founder Do Kwon

The jurisdictional tug-of-war between U.S. and South Korean prosecutors over Terra founder Do Kwon continues to drag on.

US to Challenge Extradition of Terra Founder Do Kwon to South Korea

The South Korean investor community urged authorities to send the Terraform Labs co-founder to the US for 'heavier punishment.'

South Korean Terra investor community wants Do Kwon sent to US, not Korea

The U.S. will appeal the ruling of a Montenegro Court to hand Terraform Labs co-founder Do Kwon to South Korea, according to Bloomberg.

U.S. Will Appeal Do Kwon's Extradition to South Korea: Report

US DOJ said it will continue to pursue the extradition of Terraform Labs co-founder Do Kwon from Montenegro, according to Bloomberg.

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