Singapore Investigates Collapse of Terraform Labs‘ LUNA, UST Tokens
Singapore Investigating Terraform Labs
- Singapore’s police have started a probe against Terraform Labs.
- The collapse of the project’s native token (LUNA) and its algorithmic stablecoin (UST) caused investors to lose billions.
- Do Kwon – Co-Founder of Terraform Labs – is accused of having a role in the collapse.
Singapore’s law enforcement agencies have reportedly begun a probe against Terraform Labs – the infamous blockchain project co-founded by crypto fugitive Do Kwon. In an emailed announcement seen by Bloomberg, Singapore’s police stated, „investigations have commenced in relation to Terraform Labs,“ adding the inquiries are „ongoing.“ The authorities also estimated that the 31-year-old developer is not hiding in the city-state.
The Collapse of LUNA & UST
The collapse of the organization’s native token – LUNA – and its algorithmic stablecoin – UST – was among the darkest events in crypto last year. The stablecoin, which was supposed to have a fixed $1 valuation, lost its peg against the greenback in May 2022 and plunged way below its price target. Realizing the turbulence, investors started selling their UST reserves en masse. This resulted in more LUNA being minted to stabilize the freefall, which significantly increased the supply of the native coin. Eventually, both assets lost virtually all their value in a matter of days, triggering multi-billion investor losses and a broad market decline that echoed for months.