The Curve Community Wants Terra’s UST Booted Out Of The Platform.

Amid the mounting issues beleaguering Terra, platforms hosting Terra USD (UST) liquidity flows are now rethinking their support for the crashed Stablecoin.

The latest issue about UST comes from the Curve community. The curve is a Swiss-based platform that facilitates Stablecoin on-chain liquidity. UST is one of the coins supported on the platform.

However, a member of the Curve community has forwarded a strong proposal to stop UST pools from being incentivized on the platform. The proposal argues that continuing to incentivize UST pools would be bad for Curve because, for starters, UST is no longer living up to its status as a reliable stablecoin. UST has lost 90% of its value as stablecoin. It has also been de-pegged from the USD.

Pools Could Be Compromised

According to the member forwarding the proposal, it’s still not yet clear how Terra Luna and UST chains were exploited and ruined, which means that the incentivization of UST on the Curve DAO could still be exploited by bad actors.

Ideally, bad actors could mount increased activity on Curve and bribe the pools into allowing them access to empty pools. These occupied Liquidity Pools would farm CRV without facilitating any liquidity value to the Curve DAO.

This is because the current value of UST is way below the original Stablecoin rate that was previously pegged to the US Dollar. This could be a loophole for malicious entities to occupy huge LPs and prevent others from entering resulting in a negative loop and loss of liquidity for CRV and the Curve ecosystem.

Proposal Accepted?

Curve Finance seems to be backing the proposal to boot out UST on the platform. It seemed to indicate as much in a recent tweet.

A proposal to stop all emissions to UST-related gauges (regardless on whether one weight-votes or not).

Good bye UST – it was a good experiment, but it didn't work out: UST supply grew much larger than Luna liquidity which can absorb redemptions.https://t.co/eSQPnf4rTh

— Curve Finance (@CurveFinance) May 19, 2022

Wu Blockchain reported this as well. On its part, Terraform Labs is dealing with even bigger problems at the moment. The Terra community Alleged Ongoing Voting Exercise to Rebirth LUNA Network Is Being Rigged By Do Kwon. The company, along with Do Kwon, is also facing stringent legal issues in South Korea.

Terra Founder Do Kwon is falling deep into investigations.

So a question arises Will Terra Founder Do Kwon Be Held Accountable Following Three South Korean Investigations?

South Korean congress Summons Terra Luna’s Do Kwon

A few days ago, the South Korean congress ordered the Terra Luna’s Do Kwon to be brought before the lawmakers to answer questions about the recent crash of UST and Terra Luna.

Around 200,000 South Koreans fell victim to the crypto’s price crash as Luna, crypto that was once among the top 20 best, saw its market cap dip from $18 billion to almost nothing. Just last month, Luna was trading at over $115. Today, the coin is valued at just $0.00014.

Now, it appears that another pandora’s box is about to blow up against Do Kwon. Recent reports indicate that the Terra founder is currently being investigated for tax evasion. Apparently, Do Kwon and Terra are in for a rough ride involving them and the National Tax Service of South Korea.

Terra and Kwon To Pay $78 Million In Taxes

The tax evasion allegations leveled against Do Kwon and Terra Labs amount to a whopping $78 million to be paid to the tax authorities. Interestingly, Do Kwon has already dissolved Terraform Labs from existence in South Korea and moved its operations to Singapore.

Some people have speculated that he probably knew what would happen to the Terra ecosystem because he did this right before the market crash. Reports also indicate that Do Kwon owns 92% of Terra Labs, meaning he’s the one to pay up.

This may be one of the reasons that lawmakers now want Do Kwon to appear before them and explain how Terra Luna and UST tanked and led to the loss of billions of dollars. For one, the 84,000 BTC that was meant to support Luna and UST’s price was depleted, yet the cryptos continued to crash. UST was de-pegged from the USD due to its extreme volatility and price dip.

Crime Investigation Unit Revived

Following the Terra incident, the South Korean government has revived a criminal investigations unit that was previously disbanded two years ago. The department, consisting of around 40 people, will be tasked with digging up information to find out what exactly happened to the Terra crypto ecosystem and whether Do Kwon is responsible for the losses incurred by hundreds of thousands of people across the world.

Terra investors have taken to various social media platforms to slam the voting exercise that will determine whether a new Terra chain will be created. 

Nearly 24 hours after TerraForm Labs launched a proposal to allow the community to decide whether or not a new chain will be created without the algorithmic stablecoin, over 148 million votes have been recorded, with the vast majority of voters opting in favor of the initiative.

According to data on Terra Station, of the 148.57 million votes recorded so far, 115 million votes representing 77.99% are in support that a new Terra chain should be created. However, “No with Veto” votes represent 20.28% of the total votes polled. While it is safe to say that with the results so far, the vast majority of members of the Terra community are in support of the idea that the team should create a new chain without the algorithmic stablecoin UST, opinions across various social media platforms say otherwise.

Negative Reactions Trail the Ongoing Terra Proposal Voting

Many Terra investors believe the vote is being rigged by the TerraForm Labs team led by Do Kwon, the CEO, and founder of the company, in a bid to suit its intention to create a new chain and new LUNA tokens without the stablecoin that lost its peg to the USD.

Some users claimed that a few seconds after voting started, as announced by the Terra team, over 10 million votes in favor of the proposal had been recorded.

Based on this, they argued that the voting exercise is being rigged to favor the team’s goal of creating a new chain and LUNA coins.

Yes, I entered right after the announcement and more that 10M of votes Yes were there!! Totally rigged, none wants fork, ? ? ?

— Michel Feria (@MichelFeria3) May 18, 2022

Other users, who also called out the Terra team for manipulating the voting exercise, expressed that they want the old LUNA tokens to be burnt to boost their value instead of the company creating a new chain with new LUNA tokens.

“We don’t want new chain we want burning of $luna, ….. Don’t become SCAM – FAKE Voting its looks like fake voting – all in Twitter said – burn”

We don’t want new chain we want burning of $luna

We want old LUNA – "BURN"

No on care and buy new LUNA
Don't become SCAM – FAKE Voting
its looks like fake voting – all in Twitter said – burn

— Amba Boutique (@AmbaBoutique) May 18, 2022

Another user expressed his concerns: “The $LUNA DAO has some fishy behavior going on. The voting is being rigged in the favor of the developers! WE NEED THE BURN!”

The $LUNA DAO has some fishy behavior going on.

The voting is being rigged in the favor of the developers!

WE NEED THE BURN!

— CryptoKing ? (@CryptoKing_NFT) May 18, 2022

Meanwhile, aside from the outburst on microblogging platform Twitter, Terra investors also slammed the voting exercise on Reddit.

A Redditor with the username u/shouryaaasharma, noted that the move made by the Terra team during the voting exercise shows Kwon is guilty. He points out that 16,347,621 votes were posted in favor of Fork in 11 minutes.

Fake voting by Do Kwon….16,347,621 Yes votes in 11 minutes from terraluna

Another Redditor with the username u/shoemugscale commented on the unfortunate incident saying:

“I mean, TBH, is anyone shocked at this? Dude puts out 1 option, then gives this super aggressive time-line. It goes ‘live’ with 11 million votes for YES and NO starts to gain some traction then starts losing votes. They’re gonna do what they want, this is not a ‘fair’ vote, but oh well.. Nobody should be shocked.”

Meanwhile, South Korean authorities announced yesterday that it has revived one of its special crime units to investigate the collapse of Terra tokens.

Terra (LUNA) Circulating Supply Approaching 7 Trillion Puts Coin In Doubt of Reaching $1 Anytime Soon.

More investors continue to dump LUNA into the market as TerraForm Labs announces plans to make LUNA investors whole.

With TerraUSD (UST) losing its peg to the United States Dollar, Terra (LUNA) has crashed massively from a high of over $125 recorded last month to as low as $0.0000009. 

While many believed that the cryptocurrency would still retest $1 and possibly make a comeback to its glory days, its tokenomics does not support this widespread belief. 

Top Twitter account ‘The Moon’ with 1M followers asks a simple question,

“LUNA supply is so close to 7 trillion. Is $1 a pipe dream for $LUNA and $UST?”

$LUNA supply is so close to 7 trillion.

Is $1 a pipe dream for $LUNA and $UST?

— The Moon (@TheMoonCarl) May 19, 2022

Investors Dumping LUNA

Following the crash of UST, LUNA’s circulating supply has been on a rapid increase since the ugly incident occurred this month. 

LUNA’s circulating supply has grown from 300 million tokens to nearly seven trillion within the space of fewer than two weeks. At the time of writing this line, LUNA’s circulating supply is around 6.53 trillion, thus prompting many to doubt that the digital currency would touch $1 anytime soon. 

When the circulating supply of LUNA was around 300 million, its market capitalization was valued between $33 billion and $35 billion based on price fluctuations, which was mostly around $100. 

LUNA’s Push to $1

At press time, LUNA is changing hands at $0.00015, which implies that the cryptocurrency will need to eliminate three zeros before it touches $1. 

Based on the number of LUNA in circulation, in order for the cryptocurrency to be able to achieve the $1 feat, it would require a market valuation of nearly $7 trillion, an impossible task considering the fact that the entire crypto market is worth less than $1.5 trillion at press time. 

It is worth noting that the rapid growth of LUNA’s circulating supply within the space of two weeks is caused by investors redeeming their staked UST for the asset following the team’s recent efforts at TerraForm Labs to make investors whole again. 

Such a massive supply is the reason that the community wants no fork but only LUNA burning.

Recall that the Terra team launched a proposal to fork a new chain and airdrop new LUNA tokens to existing holders, as part of efforts to make investors whole. 

While UST was not added to the plan, investors who were badly affected by the dip were left with no choice but to redeem their staked UST for LUNA. 

Korean authorities believe Terra’s collapse is not properly investigated and as such it has revived a tactical crime unit to ensure no stone is left unturned in the Terra’s ecosystem collapse. 

Following the collapse of TerraForm Labs ecosystem tokens, including TerraUSD (UST) and LUNA, the South Korean government has revived one of its specialized financial crime units to investigate the real cause behind the massive dip of Terra’s tokens. 

Revived Crime Unit

According to local media SBS News, the Korean specialized crimes unit dubbed the “Yeouido Grim Reaper,” would be investigating the circumstances that led to the collapse of Terra tokens, which Korean authorities believe has not been properly investigated. 

“As the Luna and Terra case is a case of multiple damage to the common people, it was designated as the first investigation case by the Hap Sudan after an internal review by the Ministry of Justice,” a spokesperson for the unit commented. 

The group, which was disbanded over two years as part of prosecution reform, consists of over 40 people, including prosecutors and employees from different regulatory units, including the country’s Financial Service Commission (FSC) etc. 

The Bone of Contention

Part of the focus of the investigation will center on the method Terra used to lure people into investing in its ecosystem coins. 

Terra’s promise of a 20% ROI to investors who deposit to its Anchor Protocol is suspected of being a Ponzi scheme. 

This comes a few days after Korean authorities called on Terra’s founder and CEO Do Kwon to explain the main cause of the UST and LUNA collapse. 

Terra’s Devastating Blow

It is no longer news that Terra’s ecosystem suffered a devastating blow last week after its flagship stablecoin UST lost its peg to the United States Dollar. 

The fall of UST also plunged the price of LUNA from an all-time high of $125 recorded last month to a low of $0.00000009. 

Investors did not take their Terra losses lightly as some cases of suicide were reported. Similarly, an investor was alleged to have invaded Kwon’s residence in search of him, with many suggesting that the intruder had ulterior motives. 

Kwon Under Investigation for Tax Evasion

Meanwhile, an investigation into the cause of the collapse of UST should be the least of Kwon’s troubles, as a new report suggests that the firm’s CEO is being investigated for tax evasion. 

According to a report published by Edaily, Kwon is alleged to have invaded corporate and income tax to the tune of 100 billion won ($75 million). 

In a similar development, Korean tax authorities are also investigating Terra’s Luna Guard Foundation (LFG), with a 100 billion won fine ready to be slammed on the company. 

Do Kwon De-registered His Company Right Before Terra Luna And UST Tanked.

Terra Luna is still in the headlines for all the bad reasons. After experiencing a massive price crash that wiped out over 95% of its value within weeks, the crypto is still struggling to keep up appearances in the charts. However, the Terra team, led by one Do Kwon, is now facing a huge backlash from the crypto community.

According to Leaked documents, published by DigitalToday, Do Kwon dissolved Terraform Labs just days before Terra Luna and UST experienced a market crash. This leakage has sent shivers across the Terra community and the crypto industry at large. No one really thought that Do Kwon could have done this. Even more interesting is the fact that he didn’t tell the community about it.

Was This A Rug Pull?

Further details of the leak have been published in a Reddit post with more information about the documents involved in the dissolution of Terraform Labs in South Korea. Terraform is the creator company of TerraUSD (UST).

According to the documents exposed, Do Kwon filed an application to dissolve the company on April 30. On May 4^th, the application went through and Terraform Labs ceased its status as an entity in South Korea. However, Do Kwon moved the company to Singapore but did not bother to get it licensed there.

More details emerging reveal that Do Kwon, through the Terra Foundation, transferred 52,189 BTC to the Gemini crypto exchange. He also transferred another 28,205 BTC to Binance. The coins transferred had a combined value of $2 billion and were kept as reserve backing to shore up the price of LUNA and UST in case of a crash.

The community is now wondering whether these coins were really used for their intended purpose or if their transfer was designed to fleece the Terra community under a false guise.

On the other side of the picture, you cannot move the company to a different country without dissolving it first. It might be just unfortunate timing for Terra’s CEO.

Terra Luna’s Crash Has Given Crypto A Bad Name

Luna’s crash, along with its sister stablecoin, UST, has prompted many in the industry to question the strength of various crypto to withstand hard market shifts.

Even more, the exposed chronological order of events involving Do Kwon has put the crypto industry in a bad light. Many crypto opponents have long viewed the industry as an economic terror ground rife with scams and rug pulls.

At the time of this writing, Terra Luna is still in trouble prices. The coin is trading at $0.00017 and occupying position 212 in the charts.