Speaking of crypto regulation it appears that Terra co-founder Do Kwan is officially being targeted by South Korean authorities.
This is because they issued an arrest warrant for him last week almost exactly four months to the day that Terra went to zero.
The TLDR is that Terra’s novel mint and burn mechanism for its UST stablecoin failed causing both UST and Terra’s Lunacoin to tank spectacularly.
As a result over 60 billion dollars was wiped from the total crypto market cap in the span of a few days.
Though some have suggested that Terra resulted in a 600 billion loss it’s important to remember that there were other macro factors weighing down the crypto market at that time.
In any case Luna and UST holders who saw their crypto portfolios fall to zero have been experiencing unbelievable pain since that time and have understandably been looking for retribution.
Many have placed the blame on Do Kuan hence why the recent arrest warrant is so significant.
It’s safe to say that Do’s behavior after Terra’s collapse has only resulted in more scrutiny from the Terra community.
From what I’ve seen Do has been quite unapologetic and unsympathetic.
The news that he had fled Singapore only added fuel to the fire and led to speculation that he was evading authorities.
Note that South Korean authorities reportedly announced they were going to nullify the passports of Do and other core Terra developers just a few days earlier.
I’ll also note that Do and co are being targeted for more or less the same reasons why the SEC is cracking down on crypto securities laws.
Not surprisingly all this news caused Terra’s new lunar coin along with its old rebranded Lunk and USTC coins to crash.
Some of you may recall that all three were pumping last week and I predicted in last week’s crypto review that these pumps wouldn’t last.
I reckon anyone could have predicted that what is surprising however is that Luna Lunk and USTC didn’t really react to the news that Do is not on the run and is cooperating with South Korean authorities.
Do explained on twitter that he and the Terra team are being targeted by authorities in multiple jurisdictions which is to be expected.
Regardless I must stress that Terra cryptocurrencies are standing on some seriously shaky ground especially Lunk and USTC.
It’s not clear whether any of these crypto projects will survive and their prices are likely to be extremely volatile as the case against Do and co continues to unfold.