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Do Kwon Denies New Allegations As Legal Issues Ramp Up For Stablecoin Founder

Members of the Terra-Luna community claim to have lost entire life savings in the depegging - some of which have reportedly committed suicide over the devastating loss. Despite this Kwon lives comfortably...

Founder of the now-infamous Terra blockchain and its eponymous price-stable cryptocurrency has come under fire again this week following further allegations of foul play in relation to the catastrophic crash of the Terra-Luna ecosystem.

Several yet unconfirmed reports that the CEO of TerraUSD (UST) cashed out over $80 million USD every month for almost three years. Reports surfaced claiming Kwan’s involvement in the draining of liquidity out of the now rebranded Luna Classic (LUNC) and TerraUSD Classic (USTC) before the cataclysmic collapse of the pair.

In a recent Twitter post founder Do Kwon has claimed to be ‘heartbroken about the pain my invention has brought to you all’. Despite these claims, it appears the self-styled inventor has endlessly enriched himself from the project while leaving investors and speculators alike in the dust.

Members of the Terra-Luna community claim to have lost entire life savings in the depegging - some of which have reportedly committed suicide over the devastating loss. Despite this Kwon lives comfortably while other major players in the DeFi space including Dogecoin Founder @BillyM2k have recommended Kwon “Stop trying to bring in new victims to fund the previous victims and leave the (crypto) space forever”

Luna was trading above $120 towards the beginning of April before collapsing to less than a millionth of a cent by mid-May.

Amid legal developments against Terraform Labs the ‘all-new’ LUNA has seen heightened volatility with both LUNA and Luna Classic (LUNC) falling steeply while the broader crypto market remained flat. The volatility appears to have followed a report by the U.S Securities and Exchange Commision (SEC) investigating whether Terraform Labs violated U.S. law in it’s marketing of its crypto-assets.

The new LUNA token was issued to holders in late May following the depegging, with Luna Classic being delisted from the vast majority of exchanges. At the time of writing Classic Terra is only available via Bybit and Binance, with the advent of these new legal challenges it seems now an unlikely candidate for further re-listing.

In response to the crash and growing legal issues, Cardano founder Charles Hoskinson has cautioned Cardano developers to exercise more caution in plans for the Vasil upgrade due this summer.

“Our engineers are deep in the weeds right now and working real hard on Vasil. A Massive about to do, a huge amount of testing to do. After the collapse of LUNA, we decided to add an additional test harness to what we’re doing and think really carefully about some things. It’s taking a bit more time but we figured that an abundance of caution is well rewarded these days”

In addition to the comments above, Hoskinson says the recently released Crypto regulation bill by US Senators Kirsten Gillibrand and Cynthia Lummis has the potential to be a “massive step forward” for the industry.

The SEC enforcement attorneys are investigating specifically if Terraform Labs broke rules for securities and investment products by advertising UST as a 1-1 peg to the US dollar via an algorithm dependent on trading the LUNA collateral token. Do Kwon is already facing scrutiny from regulators for Mirror Protocol, a crypto product that allows the trading of digital assets that track the price of US stocks.

Following the chaos, Treasury Secretary Janet Yellen claimed the incident had “exposed the dangers of tokens pegged to the US dollar”.

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