After its previous crash, the cryptocurrency Luna 2.0 is violently breaking its face

Between a steeply falling price from the early hours of sale and a sued founder, theThe new Terraform Labs project is just not getting off to a good start.

The beginnings are complicated for Luna 2.0. A few hours after launch, the new version of the Luna cryptocurrency was already experiencing a steep drop in value. Airing Saturday May 28 at 11am for $ 17.8, the token (term used to refer to a unit of cryptocurrency, outside of bitcoin and Ethereum) traded a few hours later at $ 3.9, a drop of almost 78%. This Tuesday, May 31, four days later, the Moon has yet to recover and is trading around $ 8, according to Coinmarketcap.

Luna 2.0 price at the end of May 2022. // Source: Coinmarketcap

Over 60 billion in losses

That’s not the only bad news for the new Moon: Transaction volume also dropped by 64 percent, from 393.4 million to 145.3 million, according to Blockwork.

The new cryptocurrency is trying to rise from the ashes of its predecessor, Luna (now called Luna Classic) and, above all, UST. This stablecoin algorithmic project was supposed to guarantee its indexation on the dollar thanks to a mechanism of burn & mint with the Moon, the other cryptocurrency based on the Terra blockchain (1 UST could be exchanged for a Moon dollar). But due to the panic in early May, the FSO stalled and attempts to get it back on its feet only worsened the situation, causing Luna and the FSO to lose all value.

The collapse of the entire Earth ecosystem resulted in the disappearance of over 60 billion. And despite this, Terraform Labs, the main development team of the Terra project, and Do Kwon, its founder, have announced their intention to relaunch a blockchain: Luna 2.0. The vast majority of developers working on the ecosystem voted on May 25 to launch the new project, which officially kicked off three days later, on the 28th. But for now, the new cryptography is failing and Terraform Labs teams may have legal problems.

Legal problems

The Terra incident has in fact attracted the attention of the Korean authorities. South Korean media JTBC reports that it has launched an investigation against Do Kwon, in order to determine whether he has manipulated the prices of Luna and UST in the past to make a profit. Korean authorities are also trying to find out if the country’s trading platforms had followed the procedures before offering the Terra tokens for purchase.

do_kwon
Do Kwon is sued // Source: Coin Desk / YouTube

To achieve this, all Terraforms employees have been summoned by the authorities and will have to present certain documents to them, indicates Blockwork. According to the outlet, employees objected to the launch of Luna and UST because they identified weaknesses in the cryptographic protocol. Despite their warnings, Do Kwon would still be pushing to get the projects off the ground. In addition to the official investigation in Korea, 76 victims filed a lawsuit against Do Kwon and Terra Forms co-founder Lab Shin Hyun-seong, for fraud.

Despite a falling price and Terraform Labs’ legal woes, Luna 2.0’s difficult beginnings may not mark the end of her adventure. Cryptocurrency project launches are always periods of fluctuation, and prices can vary significantly in the first few weeks. Furthermore, the impressive demise of the previous Moon has affected a large part of the cryptocurrency market, and it is common for investors to be cautious and not venture into it. The price of the cryptocurrency is likely to stabilize in the coming days, either up or down, remains to be seen.

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