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In recent weeks, news from the field of cryptocurrency and cryptocurrency regulation concerned mainly only the projects of Terraform Labs and cryptocurrencies LUNA and TerraUST. Let’s take a quick look at the latest news and changes in the market in light of these developments.
Terraform Labs CEO Do Kwon could go to jail after TerraUSD and LUNA collapsed. South Korea’s prosecutor’s office is considering whether he should be charged with organizing a financial pyramid scheme. Investors have already sued him. If the prosecutor’s office also does this, then Do Kwon can go to jail.
Lawyers who previously worked at Terraform Labs decided to leave the sinking project. General Counsel Mark Goldich, General Corporate Counsel Lawrence Florio, Chief Litigation Advisor Noah Exler have stopped working for the company. They blocked their corporate profiles. Now the company has to look for new consultants to solve legal problems.
Do Kwon amended the proposal to revive the Terra blockchain, just as the vote was underway. When TerraUSD collapsed, Do Kwon proposed his plan, where he proposed to create Luna (LUNA) 2.0 tokens on the new blockchain. According to Kwon, he edited several parameters, taking into account the feedback from the community.
England’s financial supervisory authority has urged all market participants to take into account the fall of TerraUSD and Luna when creating a new regulatory framework for the cryptocurrency market. This was reported by Executive Director S. Pritchard for Bloomberg.
She also advised that a very large number of investors investing in stablecoins still believe that they are governed by British law, although this is not the case. Therefore, it is necessary to conduct additional explanatory work among investors.
According to Tether CEO P. Ardoino, there is no fraud in the fall of TerraUSD and Luna. The project simply had a poor-quality architecture. He compared the TerraUSD stablecoin to the proverbial house of cards. The main problem is that Do Kwon was too confident in his abilities, but the project itself can hardly be called a financial pyramid. Poor architecture and planning led to the collapse.
Thus, what happened in TerraUSD and Luna has become one of the most important developments in the cryptocurrency economy.
The consequences of the collapse of the stablecoin will be felt for a long time and will lead to many changes in the market. The main benefit from this was received by regulators, who will try to further tighten control over exchanges and projects that issue tokens, cryptocurrencies.
There is already talk of creating a global supervisory authority for the cryptocurrency market.
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