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)

In a recent legal twist, the High Court in Podgorica has ruled in favor of extraditing Terraform Labs co-founder Do Kwon to South Korea.

High Court Shifts Extradition Route for Terraform Labs' Do Kwon to South Korea

An appellate court in Montenegro overturns an earlier ruling that approved the extradition of disgraced Terraform Labs founder Do Kwon to the United States. Kwon is facing criminal charges arising from the collapse of the stablecoin TerraUSD and cryptocurrency Luna that wiped out $40 billion worth of investor funds in 2022.

Montenegro Court Revokes Earlier Decision To Extradite Do Kwon to US, Citing Procedural Violations

Local media in Montenegro reported that Terra founder Do Kwon is cleared for extradition to his native South Korea.

Terra Founder Do Kwon Cleared for Extradition to South Korea: Report

Kwon successfully appealed a previous decision by the same court to send him to the U.S. instead.

Do Kwon Can Be Extradited to South Korea, Montenegrin Court Rules: Reports

The move comes after a Montenegrin court overturned a prior decision regarding Kwon's extradition to the United States.

Do Kwon to be extradited to South Korea after court reverses extradition to US

South Korean authorities requested Interpol's assistance in bringing back the Terraform Labs co-founder on Thursday, local media reported.

South Korea requests Interpol to assist with Do Kwon's extradition: reports

The rebooted LUNA and LUNA Classic (LUNC) both skyrocketed on Tuesday on news of Terra founder Do Kwon's latest legal developments.

LUNA Pumps 77% as Do Kwon Evades Extradition—But the Gains Are Fading

In a pivotal legal reversal, Montenegro's Court of Appeals has annulled the extradition of Terraform Labs co-founder Do Kwon to the United States, siding with his defense's appeal and invalidating a prior High Court ruling from Feb. 20. Montenegro's Appeal Court Blocks Do Kwon's U.S.

Montenegro Court Halts Extradition of Terra's Do Kwon to the US

Once again, the case will head to a lower court to be retried. Terra founder Do Kwon faces charges over the collapse of LUNA and UST.

Terra Founder Do Kwon Escapes Extradition to United States—Again

A court in Montenegro overturned a previous court's ruling to extradite the imprisoned co-founder of the Terra (CRYPTO: LUNA) blockchain network Do Kwon to the United States. What Happened: The initial ruling by the Higher Court in Podgorica on Feb. 20, 2024, had approved the expedited extradition of South Korean national Kwon to the U.S., following a request by the United States for his criminal prosecution for multiple offenses.

Do Kwon's US Extradition Overturned - What's Next?

A Montenegro court has canceled the approval of the Terraform Labs co-founder Do Kwon's extradition to the U.S.

Do Kwon's extradition from Montenegro to the US revoked on appeal

Kwon is facing fraud charges in the U.S. around his role in Terra's collapse.

Terra's Do Kwon Wins Extradition Appeal in Montenegro

In its objection, the regulator argued that Terraform Labs "siphoned" $166 million into an "opaque slush fund" for law firm Dentons.

Terraform Labs Hits Back at SEC 'Government Overreach' Over Special Counsel Payment

Terraform Labs has challenged the SEC's objection to its retention payment of Dentons as special counsel in its Chapter 11 bankruptcy case.

Terraform Labs counters SEC's ‘slush fund' claims, alleges government overreach

Do Kwon, the embattled former CEO of Terraform Labs, is currently stranded in Montenegro due to extradition delays, following accusations by the U.S. Securities and Exchange Commission (SEC) of conducting a massive fraudulent crypto scheme.

Terraform Labs Founder Do Kwon Faces Extradition Delay in Montenegro Amid SEC Fraud Allegations

The regulator argued that Terraform Labs "siphoned" the money into an "opaque slush fund for its lawyers."

SEC Hits Out at Terraform Labs Law Firm's 'Staggering' $166 Million Retainer

The U.S. Securities and Exchange Commission (SEC) has raised objections to a $166 million retainer payment to lawyers of Terraform, according to Reuters.

SEC Objects to Terraform's $166M Retainer of Law Firm Dentons: Reuters

The SEC has asked a US bankruptcy court to deny Terraform Labs' retention of Dentons as its special counsel in a filing submitted Tuesday.

SEC challenges Terraform Labs' ‘suspicious' $166 million payment to lawyers in court filing

Terra co-founder Do Kwon will likely miss the start of the SEC trial on fraud charges amidst the delay in his extradition, Reuters reported.

Terraform Labs' Do Kwon to miss start of SEC trial on fraud charges: Reuters

The cryptocurrency entrepreneur Do Kwon will likely miss at least the start of a scheduled March 25 trial on U.S. Securities and Exchange Commission fraud charges because of a delay in extraditing him from Montenegro, his lawyer said on Monday.

Terraform Labs co-founder Do Kwon to miss start of US SEC trial

Terraform Labs co-founder Do Kwon is set to be extradited to the United States after a Montenegrin court's final decision. What Happened: The Podgorica High Court denied South Korea's request to extradite Kwon, according to local reports.

Do Kwon To Be Extradited To US As Montenegrin Court Rejects South Korea's Request

A court in Montenegro on Wednesday ruled that crypto entrepreneur and Terraforms Labs co-founder Do Kwon should be extradited to the United States, rather than to his home country South Korea, to stand trial on fraud charges, the Wall Street Journal reported.

Montenegro court says Do Kwon should be extradited to US, WSJ reports

Do Kwon, former crypto billionaire and founder of the Terra (LUNA) ecosystem, will be sent to the United States to face fraud charges. In 2022, Terra's UST stablecoin and its associated altcoin LUNA went to virtually zero after its pegging mechanism didn't work as intended, wiping out roughly $40 billion in value within days.

Do Kwon Will Be Extradited to United States Following Montenegro Court Ruling: Report

In a landmark decision, the High Court in Podgorica has ruled that the former Terraform Labs CEO, Do Kwon, will be extradited to the United States, sidelining South Korea's request for his extradition. The court's ruling comes after extensive deliberations on the legal and political implications of the extradition. Report Details Do Kwon's U.S.

Do Kwon's Fate Sealed — Montenegro High Court Opts for US Extradition in Legal Tug-of-War

Terraform Labs co-founder Do Kwon will be headed to the U.S. where he faces fraud claims that led to devastating losses for U.S. investors.

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