This decision represents a major win for the United States Securities and Exchange Commission (SEC) in its ongoing battle against Terraform Labs and Do Kwon.

The verdict has sent shockwaves through the cryptocurrency community, raising concerns about the future of digital assets and the SEC’s growing influence in the industry.

Read Also: Terra Founder Do Kwon Allegedly Moved $29 Million Worth of Crypto Out of LFG Wallet After Arrest

Unveiling the Security Skeletons in Terra’s Closet

The SEC’s case against Terraform Labs and Do Kwon alleges a deliberate deception. According to the commission, Terra marketed LUNA and UST, among other crypto assets, as unregistered securities.

The court found weight in a statement made by Do Kwon, where he expressed confidence in Terra’s efforts, which the court interpreted as a promise of profit. This statement played a crucial role in solidifying the court’s view that investors in LUNA and UST were participating in a shared enterprise rather than simply speculating on digital tokens.

A Partial Victory, But the Jury Is Still Out

While the SEC celebrates this victory, the legal battle is not over. Judge Rakoff dismissed charges related to security-based swaps and fraud, deeming them complex and requiring further examination. These charges will be decided by a jury in an upcoming trial.

The outcome of these remaining charges adds an element of suspense to the case. If proven, the fraud charges could have severe consequences for Terra, potentially resulting in substantial penalties.

On the other hand, a jury ruling in Terra’s favor on the fraud claims could cast doubt on the entire securities argument, challenging the SEC’s regulatory ambitions in the crypto space.

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Read Also: Do Kwon Accuses FTX Founder of Manipulating Terra (LUNA) and UST Prices, Others Share Evidence

Echoes of Ripple and the SEC Power Play

The Terra case bears similarities to the ongoing legal dispute between the SEC and Ripple, where the classification of XRP as a security is fiercely contested.

Although Judge Rakoff denied Terra’s attempt to use the Ripple ruling as a defense, the parallels between the cases are evident. This ruling, combined with the SEC’s recent classification of ADA and SOL as securities, indicates an increasingly assertive regulatory landscape for digital assets.

The verdict in the Terra case serves as a chilling precedent for the cryptocurrency industry, highlighting the regulatory uncertainty that looms over the sector. With the SEC wielding the “securities” label as a powerful tool, both innovators and investors are left grappling with the question of what lies ahead.

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The post SEC Scores Major Victory As Court Declares Terra (LUNA) and UST as Securities appeared first on Times Tabloid.

The recent lawsuit filed against Kwon was reported by a legal news platform Law360. The suit also involves two Terraform Labs executives. They are being charged with violating the Racketeer Influenced and Corrupt Organizations Act, inflating the price of UST and publicizing false information to mislead the public over the allegation of money laundering, worth $80 million, leveled against them.

Read Also: Proposal for the Massive Burn of Terra Classic (LUNC) To Boost Price Receives 83% Support: Details

The report reads in part:

“Defendants touted the stability of the coins and guaranteed 20% annual returns on coins deposited in Terraform Labs’ high-yield savings application on the Terra blockchain — the Anchor Protocol.”

According to the report, the lawsuit was filed by Matthew Albright in New York federal court, on behalf of all the victims of the TerraUSD (UST) collapse. It’s also revealed in the report that Plaintiff bought the stablecoin UST between May 1st, 2019, and June 15th, 2022. Aside from the defendants mentioned above, the suit also named some ventures as defendants.

The plaintiff alleged in the filing that some defendants initiated various money laundering activities to move assets worth millions of dollars into their respective wallets. He further alleged that UST was designed to serve as a Ponzi scheme.

Read Also: “You Didn’t Buy TerraUSD (UST) From Me,” Do Kwon Hits Back

Law360 added:

“As long as demand for UST remained high, Terra’s UST/Luna exchange mechanism will keep the supply of Luna relatively low and sustain a Luna price that could support UST’s peg…

“But as soon as the demand for UST fell and users began redeeming UST for Luna in large quantities, Luna could enter a vicious cycle of hyperinflation that would collapse its own price and UST with it.”

Meanwhile, a Terraform Labs spokesperson, who reached out to TimesTabloid via an e-mail, wrote, “Terraform Labs will not comment on pending litigation other than to say it believes the claims are meritless and it intends to defend against them fully.”

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The post Terra (LUNA) Founder Do Kwon Slammed With Fresh Class Action Lawsuit over TerraUSD (UST) Crash appeared first on Times Tabloid.

May 2022 was a month that can never be forgotten in the history of the crypto industry. A month that recorded the largest ever crypto collapse.

TerraUSD (UST), the algorithmic stablecoin of Terra blockchain, lost its peg. At the same time, Terra (LUNA), which is now renamed Terra Classic (LUNC), dropped from around $100 to fractions of a Cent within a few days.

Read Also: Mike Novogratz Breaks Silence on Terra Collapse, Speaks on Galaxy Digital’s Investment in LUNA

$12 Million Reimbursement for LUNA Victims

According to InsurAce in a blog post, $12 million will be spent to compensate 155 investors that were grossly affected by the Terra collapse.

InsurAce was specifically launched in April 2021 to provide risk protection services to the decentralized finance (DeFi) industry. It’s meant to insure users’ investments against sudden collapse or bankruptcy such as that of Terra ecosystem.

Due to the increasing insurance claims, InsurAce has to spend about $11.7 million to compensate investors. It’s worth noting that the firm only received relatively $94,000 in insurance premiums from UST investors.

The DeFi insurance firm has a token codenamed INSUR and specially created for investors and stakers to vote on various issues. It was a voting process that found 155 claims eligible, while 18 claims were found ineligible.

Read Also: Hacktivist group Anonymous Vows to Expose Do Kwon over Terra (LUNA) Collapse: Details

Reacting to the development, Dan Thomson, the CMO of InsurAce, said:

“The decentralized voting was conducted by InsurAce’s community of Claims Assessors who hold and stake INSUR Tokens. And at the conclusion of the Voting process, they approved a total of 155 UST de-peg Cover claims and 18 rejected as not ineligible in line with the Stablecoin de-peg Cover terms and conditions.”

Also, the CMO disclosed that the firm has a plan to compensate investors and stakers since the money used for compensations belongs to them.

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The post 155 Victims of Terra (LUNA) Collapse to Get about $12 Million Compensation: Details appeared first on Times Tabloid.

In the first interview since the historic collapse of the Terra ecosystem, Kwon, who named his only child Luna, revealed that a leak within the Terraform Labs contributed to the major crash.

Kwon said the timing of the planned withdrawal of UST liquidity from the stablecoin’s main Curve pool was supposed to be known by only TFL employees. The drop in liquidity later made it easy for the attacker to make UST lose its $1 peg.

In the course of the interview, he told Coinage that there were probably some information flows they were not aware of to this day.

Read Also: Do Kwon on Terra (LUNA) Collapse: There Have Been No Charges From Korean Authorities

Plans to Airdrop Additional Funds

Speaking on his future with Terra 2.0, Kwon said his intention is to keep building on the new blockchain. However, he believes that he will no longer be at the center of everything, unlike the previous blockchain that collapsed.

Do Kwon noted:

“I think the core of that community still lives on and I think they are primed to launch interesting things on top of Terra 2.0 independent of the things that we do…

“I’m always going to be doing things on Terra and for the Terra community, this is my home and this is where I feel like there’s the brightest future and most of Terraform Labs is still in.”

Although some executives and the legal team abandoned the firm in the middle of the crash, only two developers jumped the ship, Kwon stated.

Read Also: Mike Novogratz Breaks Silence on Terra Collapse, Speaks on Galaxy Digital’s Investment in LUNA

The Terraform Labs founder is also considering options to airdrop additional funds to victims of the UST collapse, using the Luna Foundation Guard (LFG) reserves of 311 BTC worth around $6.7 million and a lump of Avalanche (AVAX) tokens that were not spent during the fiasco.

Do Kwon said as soon as the UST holders are properly accounted for, the plan is to liquidate the LFG’s holdings and start the process of making the airdrops get to smallholders.

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In the yet to be fully released interview by Coinage Media, hosted by Zack Guzman, titled “inside Crypto’s Largest Collapse”, Do Kwon made his first face-to-face interview since the Terra historic collapse of May 2022.

The brief video was released to prepare the people who have been waiting to see Do Kwon speak exclusively about the Terra collapse.

Read Also: Terra (LUNA) Founder Do Kwon Issued “Notice upon Arrival” By Korean Ministry of Justice: Details

In the clip that lasted for just 1 minute and 30 seconds, Terraform founder referred to crypto as a wild card, stating that a lot of pressure was mounted on TerraUSD (UST) as an algorithmic stablecoin.

In the course of the interview, Do Kwon said Terra was not designed to defraud or scam people. He said UST was made to be a stablecoin but failed to remain stable

Do Kwon noted, “…It was supposed to be a stablecoin, but didn’t remain stable. It was started to become industry’s standard, I bet big, but I think I lost…”

EXCLUSIVE: I sat down with Terra Founder @stablekwon for his first interview since the project’s $45 billion collapse

Our 2-day conversation premieres only on the community-owned NFTV series @coinage_media. Episode 0 coming Mondaypic.twitter.com/9svfn9wBDn

— Zack Guzmán (@zGuz) August 14, 2022

The implosion of the Terra (LUNA) ecosystem in May was an event that will remain in the memory of crypto enthusiasts. The ecosystem crashed with the life savings of many people, which led to a number of reported suicides.

The total amount lost in the implosion was relatively $45 billion. The devastating event shook the entire crypto market and other assets, including Bitcoin (BTC) and Ethereum (ETH), are still struggling to recover from the negative impact.

Read Also: Do Kwon Debunks Claims That Terraform Labs Has Special Privilege on Terra Classic (LUNC) Governance

Since the incident happened, Korean prosecutors and other international bodies, have been scrutinizing Terraform Labs founders, including their present and past employees.

It can also be recalled that Kwon confidently told The World Street Journal back in June that he didn’t run a fraudulent project contrary to what many people insinuated.

Do Kwon said, “I made confident bets and made confident statements on behalf of UST because I believed in its resilience and its value proposition. I’ve since lost these bets, but my actions 100% match my words. There is a difference between failing and running a fraud.”

He also said, “I have great confidence in our ability to build back even stronger than we once were. Many builders are in the process of relaunching their apps on the new chain.”

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The post Do Kwon Breaks His Silence, Says He Lost His Big Bet on Terra (LUNA) and UST appeared first on Times Tabloid.

When speaking with Decrypt on the latest episode of the gm podcast, Zhao said he was disappointed with how Terra’s collapse was handled. He added that the speed of operational response was weak. But he said the stablecoins backed by fiats such as Tether (USDT) and USD Coin (USDC) are also not risk-free.

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CZ Binance noted:

“Just because one project fails doesn’t mean algo stablecoins will never work. But algo stablecoins do have, I would say in general, higher risk than fiat-backed stablecoins.

“It’s a different type of risk, but much clearer. When you benchmark one asset, when you use one asset for collateral or to peg a different asset, there’s always going to be volatility. So that risk is much higher in algo stablecoins.”

Before the collapse of the Terra ecosystem, Do Kwon, the founder and CEO of Terraform Labs, was one of the people that crypto investors held in high regard. With a market cap of over $30 billion, Terra was one of the biggest blockchains, until the historic collapse in May.

Read Also: CZ Binance Shows Support for Terra, Points out Potential Issues with Forking Terra Blockchain

Terra used computer code for constant stability, but the code failed, leading to the depegging of TerraUSD (UST). The loss of its pegs also took down the value of the second native token on the blockchain Terra (LUNA). It ended up trading at fractions of a Cent.

Speaking about what will aid the future health of stablecoins, Zhao said:

“That one project [Terra] did shine a pretty big light on some of the deficiencies, or some of the higher risks, in this area, which is very important for us to learn. I think as users or as industry players, as regulators, we need to educate the masses. We need to increase education on the users. We should be teaching people about different risks about stablecoins in school.”

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The post CZ Binance: Not All Algorithmic Stablecoins Will End like TerraUSD (UST) appeared first on Times Tabloid.

According to the analysis by the blockchain data platform, the collapse of TerraUSD (UST) played out in three stages.

The data shows that a few large trades broke UST’s peg, which triggered a selloff. Although there were attempts to restore the peg, the continued selloff drained the funds and made the mission to restore the lost peg impossible.

Read Also: $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670

Chainalysis Detailed How the TerraUSD (UST) Collapse Happened

According to Chainalysis, on the 7th of May, Terraform Labs (TFL), the firm behind the development of Terra blockchain led by Do Kwon, withdrew 150 million UST from the decentralized exchange 3pool as part of a pre-planned public move to send the funds to another pool.

The whopping withdrawal drastically reduced the liquidity in 3pool. About 13 minutes later, an anonymous trader who seemingly wanted to leverage this vulnerability swapped a total of 85 million UST for USDC.

Afterward, another anon trader swapped 25 million UST on four different occasions in the space of one hour, draining a total of 100 million UST in a short while.

According to the report, Terraform Labs also withdrew another 100 million UST to rebalance the ratio of UST to other stablecoins, but by that time, UST had lost its peg. This triggered investors to start withdrawing funds locked in Anchor Protocol.

The report further stated that between the 7th and 9th of May, three anonymous traders swapped a total of $480 million worth of USDT for UST in an attempt to restore the peg. Although the stablecoin showed a sign of recovery after the whopping swaps, it was still not enough.

Likewise, on May 8, the Luna Foundation Guard (LFG), the non-profit behind the Terra ecosystem, started to convert its billions of dollars worth of reserves to UST in order to aid its price increase to meet the peg. But by May 10, its reserves were drained, and a massive plunge in UST price then followed.

Read Also: Do Kwon Refutes Cashing Out $2.7 Billion Worth of LUNA and UST Before the Crash, Shares His Side of the Story

Why Terra (LUNA) Price Crashed

At the same time, the liquidity of 3pool was vanishing, which made investors to start burning UST to mint LUNA. This action quickly increased LUNA’s supply to trillions and subsequently dipped its price to fractions of a dollar.

In conclusion, Chainalysis wrote, “UST’s collapse may pose a threat to consumer confidence in the short term and serve as a legislative catalyst in the long term, but it’s unlikely to stop the growth of responsible innovation in the industry. Fortunately, thanks to blockchains’ transparency, we can learn from these incidents, educate others, and continue to build trust in cryptocurrency.”

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The post Chainalysis Pinpoints Large Trades That Triggered TerraUSD (UST) and Terra (LUNA) Collapse: Details appeared first on Times Tabloid.

In a recent video, Hoskinson pointed out that the notable crash of the Terra blockchain’s algorithmic stablecoin TerraUSD (UST) has prompted Cardano developers to be more careful on the implementation of the Vasil hard fork.

Read Also: Buterin Explains How to Create Algorithmic Stablecoins That Don’t Become Ponzis or Collapse

Charles Hoskinson noted:

“Our engineers are deep in the weeds right now and working real hard on Vasil. A massive amount 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 the abundance of caution is well rewarded these days.”

It should be noted that Vasil hard fork is an upgrade that aims at increasing the scalability of the Cardano network and boosting the functionality of Plutus, Cardano’s smart contract platform. The Vasil hard fork combinator event is slated to play out in late June.

Hoskinson also commented on the recently introduced crypto regulation bill by Senators Cynthia Lummis and Kirsten Gillibrand, which seeks to provide regulatory clarity for digital assets, tax crypto assets responsibly and protect consumers.

Read Also: Hoskinson Hits Back At Luna Founder for Making Negative Comment about Cardano (ADA)

Hoskinson said, “Frankly this is a massive step forward. It’s an example of where Washington actually did listen to the industry. And engaged with people. And it didn’t bias it towards one crazy standard or another and a lobbyist hasn’t gotten hold of it and turned it into some toxic monster that only benefits one actor over another…

“My hope is over the next 12-24 months if we all work together we can finally get something passed and then it’s done. We actually have a foundation of regulation that’s not intrusive and allows us to innovate as an industry.”

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The post Cardano Creator: Terra (LUNA) Collapse Has Prompted a Change in Cardano’s Vasil Upgrade appeared first on Times Tabloid.

According to NOWnews, at 2 a.m. on Tuesday, May 24th, a security guard working on the night shift at Taichung’s 7th Redevelopment Zone heard a loud noise, rushed out to investigate, and found a severely injured man lying on the floor.

Read Also: I’m Disappointed in Terra Team, Says CZ, As He Explains Why Binance Delists LUNA and UST

After the arrival of police at the scene, it was instantly clear that the man is dead. After lots of inquiries into the apartment, the police discovered that the deceased was a 29-year-old tenant surnamed Wu, who occupied the 13th floor before his death.

The report says that Wu left no apparent suicide note. However, after inspecting his phone, police discovered that he had recently complained to his relatives that the LUNA he accumulated has lost 99% of its value in just two days. He wrote that his massive loss is making him feel depressed.

$2 Million Worth of Terra (LUNA) Crashed To US$1,000

According to a text message found on his phone, Wu purchased $2 million worth of LUNA tokens, after the collapse of Terra blockchain, he was left with only US$1,000.

Read Also: Ethereum’s Vitalik Buterin: Terra Should Prioritize Smallholders in Any Proposed Reimbursement Plan

However, police pointed out that his financial dealings and the main cause of his death are still under investigation. So, nothing has been confirmed yet.

Meanwhile, the Collapse of the Terra Blockchain became apparent on the 12th of May 2022, after its algorithmic stablecoin TerraUSD (UST) got depegged and Terra (LUNA) lost about 99% of its value.

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The post Man Commits Suicide After His $2 Million Invested In Terra (LUNA) Crashed To $1,000 appeared first on Times Tabloid.

1.388 Billion UST To Be Destroyed

Terraform Labs, the firm behind the Terra blockchain project led by Do Kwon, has recently announced that the governance voting for its proposal to burn the excess TerraUSD (UST) has ended.

Read Also: Do Kwon’s Proposal to Rebirth Terra Blockchain Gains Approval: Here’s When LUNA 2.0 Tokens Will Be Airdropped

The proposal 1747 titled, “Burn The Remaining UST in the Community Pool + Cross-Chain Liquidity Incentive UST 2” was submitted about a week ago in the Terra governance platform to determine whether to burn the excess UST in circulation.

How the Terra Community Voted

According to the data found on Terra Station, the proposal attracted a total of 154,583,349 votes, representing 42.1% of those eligible to vote.

Based on the data, out of the total votes, 153.64 million votes went in favor of the proposal, representing 99% of the total votes. This indicates that the Terra community is fully in support of the enormous burn.

Now that the vote has ended in favor of the burn, the Terra team will not hesitate to implement the community’s decision by destroying the remaining UST in the community pool, including the stablecoin in the cross-chain and liquidity incentive protocol.

Read Also: CZ Explains Why Binance Resumes Terra (LUNA) Trading Despite Collapse

The total amount of tokens to be burned is 1.388 UST. 1.017 billion of these tokens are held in the community pool, while about 370 million tokens are in Ethereum.

It should also be noted that the amount of tokens to be burned is 11% of TerraUSD (UST) total supply. This burn is urgently needed to help restore the value of the depegged stablecoin, to give UST holders a reason to smile again.

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