Luna and UST fiasco that took the entire crypto industry by surprise began on May 9th. The price of Luna crashed nearly 100%, and UST is still depegged. But even though investors are not happy, they are not pinning this on Do Kwon as something intentional. However, a few details surfaced on Reddit suggest that everything might have been planned. Do Kwon dissolved Terraform Labs on April 30th, which shows that it might have to eliminate any responsibility that could have come with the crash. It also indicates that Do Kwon might have known something was going to happen.
Was everything planned?
One cannot say for sure only because the company was dissolved, but it does point us in a particular direction. And most of the time, the easiest explanation is the correct one. Once again, I am not making any allegations about anyone but presenting the points shared by the Reddit post.
There were also rumors that the Bitcoins that were sent to exchanges to act as reserves were stolen by them. No proper information on what happened to the funds and how much it helped in stabilizing the coin was shared.
What happened to Luna?
As the price of UST got depegged, it created an arbitrage opportunity that led to the swapping of UST tokens for Luna and cashing in. When investors started to do this in large quantities, the price of Luna crashed due to the huge supply of the token. In just a week, Luna’s supply increased from millions to trillions. This is the kind of inflation you rarely see, and as a result, investors lost all their money.
If you have been thinking about investing in Luna, it might be a better option to stay out. Even though the Luna foundation seems to be working on a recovery plan, I don’t think anything will work after the trust in the project has faded away. When the price of Luna was down to $30, no one thought it would fall further, and so was the case when it reached $2. So, you never know how long the fall is going to continue.
What are your thoughts as it was found that Do Kwon dissolved Terraform Labs before the crash happened? And do you think all of this could have been planned? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Solana’s massive VC holding is concerning in the bear market.
