Terraform Labs
Lessons we learned from the Terraform-FTX implosions
In May 2022, Terraform Labs’ LUNA cryptocurrency and TerraUSD (UST) stablecoin collapsed, triggering a massive shock in the crypto industry. Six months later, the bruised industry took another hammering as one of the largest cryptocurrency exchanges, FTX, filed for bankruptcy protection and billions of dollars of user assets went missing. The FTX empire, once valued at more than $30 billion, fell to zero in fewer than 10 days. FTX reportedly has more than 1 million creditors, most of whom are retail investors who were convinced that FTX would not collapse and had been keeping their assets on the exchange. Taking a look at Mt. Gox in 2014 — whose creditors still failed to reclaim compensation — FTX may be a repeat of that mistake. It can be said that FTX succeeded because of Alameda Researc...
The SEC should be aiming at Do Kwon — But it’s getting distracted by Kim Kardashian
In less than a week, Terraform Labs founder Do Kwon’s passport will expire. Interpol issued a red notice for Kwon last month, and this month, his assets were reportedly frozen by the South Korean government. Kwon has been tweeting freely in response — and almost always denies the reports. “I don’t know whose funds they’ve frozen, but good for them, hope they use it for good,” he wrote in one message. Playing a game of cat and mouse with both the authorities and the public, Kwon seems to be living a life of freedom while enjoying his internet access. Meanwhile, regulators with the United States Securities and Exchange Commission have been highly vocal in reprimanding Kim Kardashian and other celebrities for shilling assorted cryptocurrency projects. Although they deserve to be rebuked...
WSJ: Terraform Labs claims case against Do Kwon is ‘highly politicized’
Terraform Labs, the company behind the development of the Terra (LUNA) blockchain said South Korea’s case against its co-founder Do Kwon has become political, alleging prosecutors expanded the definition of a security in response to public pressure. “We believe that this case has become highly politicized, and that the actions of the Korean prosecutors demonstrate unfairness and a failure to uphold basic rights guaranteed under Korean law,” a Terraform Labs spokesman said to The Wall Street Journal on Sept. 28. South Korean prosecutors issued an arrest warrant for Kwon on Sept. 14 for violations of the countries capital markets laws, but Terraform Labs laid out a defense arguing Terra (now known as Terra Luna Classic (LUNC)) isn’t legally a security, meaning it isn’t covered by capital mar...
Breaking: Interpol ‘Red Notice’ issued for Do Kwon — South Korea prosecutors
Interpol has reportedly issued a “Red Notice” to law enforcement worldwide for the arrest of Terraform Labs co-founder Do Kwon. South Korean prosecutors in Seoul on Monday told Bloomberg the international policing organization issued the notice in response to charges Kwon faces in South Korea related to the collapse of the Terra ecosystem. The news comes only a week after South Korean prosecutors reportedly asked Interpol to issue a “Red Notice” for Kwon on Sept. 19. A Red notice is a “request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action” according to the Interpol website. It also comes less than two weeks after South Korean authorities issued an arrest warrant for Kwon and five other associates for alleged...
Terra co-founder Do Kwon says he’s not ‘on the run’
Do Kwon, the co-founder of the Terra ecosystem, took to Twitter on Saturday asserting he’s “not ‘on the run’ or anything similar” after the Singapore Police Force (SPF) said Kwon wasn’t in the city-state. On Sept. 14, South Korean authorities issued an arrest warrant for Kwon and five other associates for alleged violations of the country’s capital markets laws. All were known to be in Singapore at the time, with prosecutors also attempting to revoke their passports a day later on Sept. 15. “For any government agency that has shown interest to communicate, we are in full cooperation and we don’t have anything to hide,” Kwon tweeted. I am not “on the run” or anything similar – for any government agency that has shown interest to communicate, we are in full cooperation and we don’t hav...
‘Grim Reapers’ financial crimes unit revived to investigate Terra collapse
Legal troubles are mounting for the co-founder of failed Terra crypto project Do Kwon as the South Korean government revives the dormant “Grim Reapers of Yeoui-do” to investigate Terra’s fall. The special investigative and prosecutorial team consists of members from various financial regulators, and is designed to prosecute securities fraud and unfair trading schemes. Potentially at risk are co-founders Do Kwon and Shin Hyun-seong, along with core members of the Terra team. Yeoui-do is the financial center of Seoul. Today: Korea’s “Grim Reapers of Yeouido” – Financial and Securities Crime Joint Investigation Team – are back after 2.5 years. And its first target is $LUNA / @terra_money — Jun (@zunahn) May 18, 2022 Korean news outlet SBS News confirmed on Wednesday th...
Early polling from Terra vote indicates 91% are in favor of ‘rebirth’
Terraform Labs CEO Do Kwon’s plan to create a new blockchain “without the algorithmic stablecoin” TerraUSD (UST) has the support of 85 million community votes. In a proposal opened to the Terra (LUNA) community on Wednesday, more than 91% of votes at the time of publication were in favor of “rebirthing” the Terra network — roughly 85 million out of 93 million, with up to 284 million votes yet to be cast. The proposal needs roughly 188 million votes in favor to pass before the window closes on May 25. At the time of publication, the biggest validator to come out in support of the proposal is Terra infrastructure provider Orbital Command, holding 1.39% of the voting power. Major validators with more than 2% of voting power have not yet made a decision, including cross-chain stablecoin bank O...
Crypto users react to Terraform Labs legal team purportedly leaving company
The ongoing saga with Terraform Labs, the blockchain developer behind Terra (LUNA), took a turn following a supposed change in employment status for many on the firm’s legal team. According to their LinkedIn profiles, Terraform Labs general counsel Marc Goldich, chief litigation and regulatory counsel Noah Axler and chief corporate counsel Lawrence Florio have all stopped working for the blockchain firm as of May 2022. Goldich started at Terraform Labs in August 2021 while Axler and Florio joined in January 2022. The change in employment status for three members of Terraform Labs’ legal team followed major volatility in the crypto market after the price of LUNA collapsed to $0.00 within two weeks. Stablecoins including Tether (USDT) depegged from the U.S. dollar, while the price of TerraUS...
Terraform Labs gifts another $880M to Luna Foundation Guard
Terra (LUNA) blockchain developer Terraform Labs (TFL) has gifted the Luna Foundation Guard 10 million LUNA worth around $820 million at current prices. The Luna Foundation Guard (LFG) is a nonprofit organization attached to Terra that is tasked with collateralizing the network’s algorithmic stablecoin Terra USD (UST) to keep it pegged with the U.S. dollar. Terraform Labs’ latest announcement came via Twitter on April 14, but did not outline what the funds will go towards specifically. However, transaction data from Terra Finder shows that 7.8 million LUNA (roughly $630 million) was promptly transferred out of the LFG’s reserve wallet yesterday. TFL has gifted an additional 10 million $LUNA to the @LFG_org. https://t.co/tNirkgGGm0 — Terra (UST) Powered by LUNA (@terra_money) April 14, 2022...
Terra founder reveals what will happen to UST if Bitcoin price crashes
Terraform Labs CEO Do Kwon has conceded that a crash in the price of Bitcoin would be “negative” for the stability of the UST stablecoin, but that he expects Bitcoin to go up. Terraform Labs is the entity behind the Terra (LUNA) blockchain platform which plans on buying a total of $3 billion in Bitcoin as a reserve for the UST stablecoin. Kwon made the comments in an interview on the Unchained podcast on Mar. 29. Host Laura Shin asked Kwon what the short term implications of holding so much BTC will be for the stability of UST. Kwon said “the worst case would be if we were buying Bitcoin and a crash happens six months later, and it’s correlated with a massive fall in demand for UST” which would be, as he modestly put it, “negative.” However, that scenario isn’t keeping him up at nigh...
