Terra Luna, which deprived investors of tens of billions of dollars, soaring up again

Bit Team
3 min readSep 13, 2022

Do Kwon, South Korean programmer and entrepreneur, celebrated his 31st birthday on Tuesday, September 6. But he celebrated it not in his native Seoul, but in Singapore, 4,700 kilometers away. Although the latter is the international Mecca of crypto business, Do Kwon has another reason to stay there, and not get too close to the Korean Peninsula: he is being chased by the police at home.

The May collapse of the UST stablecoin and the associated Luna cryptocurrency cost investors around the world $60 billion. It was a whole ecosystem of virtual financial services running on a blockchain developed and managed by Terraform Labs. It was founded and headed by Do Kwon. Although many critics have pointed out that this is a very dubious algorithmic concept and that it is too similar to a fraudulent Ponzi scheme, this has not deterred investors.

Neither small retail nor large institutional. A prominent supporter of Do Kwon was, for example, the famous billionaire and founder of the Galaxy Digital Foundation, Michael Novogratz, who first tattooed the Bitcoin logo on one hand, and then on the other an image expressing his confidence in the Luna cryptocurrency. In August, he announced that in the second quarter of 2022, his company suffered losses of more than half a billion dollars caused by the collapse of the Do Kwon project.

But when looking at the charts of the most traded cryptocurrencies, there is a feeling of deja vu. Coinmarketrate.com, a web resource providing data on cryptocurrencies being traded worldwide, reports that over the past week Luna has increased in price by more than 200 percent. During the same time, Bitcoin has grown by nine percent, Ethereum, which is awaiting the transition to a new protocol, by 13 percent, and BNB, Binance’s popular cryptocurrency token — by 6.5%.

And it remains unclear what is behind the sudden growth, which began on Friday, September 9, is unclear. Up to this point, Luna had been trading around two dollars for a long time, daily transaction volumes reached a maximum of $50 million, and could not, quite logically, attract special attention even to established DeFi products. However, since Friday, transactions have been estimated in billions, and the price per coin has exceeded $6.

An old coin under a new name?

But today’s Luna is not the same Luna as the original one, although the brand is the same. After the May crash, Do Kwon and Co launched a different protocol and a modified blockchain, releasing new tokens into the world, which they called Terra with the exchange ticker Luna. And among the original ones, which almost lost their value after a big washout, they made Terra Luna Classic with the LUNC ticker. However, even this token has risen in price by 70 percent over the past week and is being sold for $0.00044.

According to the LunarCRUSH service, the sudden mania is the work of speculators and small investors, since even in social networks in recent days the question of how to make money on the purchase of these cryptocurrencies has been actively discussed. Market experts note that this is another round of a clever investment scam, unlike the so-called meme tokens, the price of which has risen sharply due to the interest of small investors and without taking into account the real quality of the company.

Do Kwon himself faded into the background after the spring fiasco. South Korean police are investigating his colleagues, who were banned from leaving the country on suspicion of tax and other fraud. He says that investigators have not contacted him, but he is not going home yet. And he hasn`t been particularly active on Twitter since April.

However, on Friday, September 9, when Luna began to unexpectedly gain momentum on the stock markets, his Twitter account woke up, where he had been mostly just responding and reacting to other tweets for many weeks. But now, he posted a short message there with the “work and correction”emoji.

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