Terra Classic Surges By 17%; Korean Prosecutors Seek Arrest of Co-Founder
With the implosion of the LUNA coin, the Terra ecosystem was devastatingly hit within a few days in May 2022. The successor, Luna Classic (LUNC), currently once again surged in price.
LUNC briefly rose to $0.00019439, registering a 20% price increase. At press time, the LUNC price showed a correction. However, LUNC was still at $0.00018 and showed a price increase of 11% over the last 24 hours.
LUNC price, 4-hour chart. Source: TradingView
The background for the sudden pump was the fact that Binance destroyed more than 6 billion LUNC in the sixth batch of the Terra Classic token burn on Thursday. Binance sent $1 million worth of LUNC tokens to a dead address, wiping out 12.77 million LUNC.
With the current token burn, Binance has now destroyed nearly 20 billion LUNC tokens.
— LunaBurnTracker (@LunaBurnTracker) December 1, 2022
The leading crypto exchange introduced the Terra Classic (LUNC) burn mechanism for trading fees in September this year. It was a response to a LUNC community proposal.
All trading fees for LUNC spot and margin trading pairs are burned by Binance by sending them to the LUNC burn address. The specific amount of LUNC burned and the on-chain transaction ID are published each month.
With the token burn, the LUNC community aims to make the token deflationary by destroying tokens and thus reducing the overall supply.
According to the supply/demand theory, an increase in value occurs when the supply decreases and the tokens become rarer. For the moment, this seems to work quite well as LUNC has seen green daily candles on most occasions when the burn took place.
Terra Co-Founder Facing Arrest In South Korea?
In other Terra ecosystem news, Terraform Labs Pte. Ltd. co-founder Shin Hyun-Seung, also known as Daniel Shin, and seven other Terra employees are facing a court hearing in South Korea today.
The hearing from South Korean prosecutors is for the issuance of an arrest warrant for the eight individuals. To that end, hearings began today for Shin and the other Terra employees.
According to the Korea Times, Shin is accused of making illicit profits of over 140 billion Korean won, the equivalent of about $107 million, from the cryptocurrency LUNA.
He is accused of promoting the Terra stablecoin as a payment method despite multiple warnings from regulators and misusing the private data of Chai Corporation users to promote Terra Luna.
South Korean prosecutors accuse Shin and his partners of violating the Capital Markets Act and the Electronic Financial Transactions Act, as well as dereliction of duty.
Shin denies the charges, claiming that he sold over 70% of his LUNA holdings before the price spike. Also, he’s claiming that he still held a significant amount of LUNA during the May collapse.
A decision is expected either in the late Friday evening hours in South Korea or on Saturday.
Remarkably, Terra CEO, Kwon Do-hyung, better known as Do Kwon, is still on the run. South Korean authorities issued an arrest warrant for Do Kwon in September.
In October, his passport was declared invalid by South Korean authorities. Rumors have it that Do Kwon was in Singapore, Dubai and Europe in the meantime.