Terra in Trouble Again
Market Meditations | June 3, 2022
It’s going to take some time for Terra to be out of the news. After UST, their native ‘stablecoin,’ tanked and lost its peg to the dollar. The coin destroyed roughly $40 billion worth of value for investors. But they released Terra 2.0! So all is well – or is it? Terra is now being investigated by Korean prosecutors. Let’s learn more about the investigation.
- Korean prosecutors have launched an official investigation into the TerraUSD crash.
- Reportedly, they are summoning employees of Terraform labs and at least one employee has already testified.
- This employee stated that there were concerns about UST’s design from multiple people within Terraform Labs.
- The team could have known about Terra’s flawed self-correcting mechanism and warned Do Kwon about the possible collapse.
- Per the JTBC report, prosecutors are looking to see if Do Kwon neglected the design flaws.
- Prosecutors are also looking to see whether or not local crypto exchanges went through proper listing reviews before listing UST and Luna.
This story is still unfolding at the time of writing. Though Terra 2.0 has already launched, if Do Kwon is found guilty of neglecting design flaws, this could impact Terra 2.0 causing many to lose trust in anything backed by him.
