Terra is currently wading through a rough storm of legal troubles (lawsuits), adoption issues, low investor confidence and a dent in the ecosystem’s reputation. The newly launched Terra 2.0 ecosystem following the downfall of the now-renamed Terra Classic has expectedly not impressed but it hasn’t been mundane either. Last week, the WSJ reported that Terra founder Do Kwon is determined to make the new chain successful.
In the market, the native LUNA token printed a decent green candle a few hours ago, gaining more than 12% and showing signs of coming off a five-week period of dormancy. Though LUNA has cooled off to $2.16 at writing, it is still trading up 9.05% on the day. The recent upswing couldn’t come at a better time as pressure was mounting on bulls to make a move or remain at risk of being pushed below the $2.00 mark.
LUNA’s price action since the token started trading on exchanges at the end of last month has been dull owing to the poor state of the crypto market.
LUNA/USD trading chart this month
Coupled with poor faith in the token by investors who lost a fortune, it is hard to call a bullish outlook on LUNA in the long term. Despite charting an ascent in the last few hours, technical analysis shows the token certainly isn’t in the clear. Bulls need to climb a few steps up to around $2.30 to inspire an upside and contend for the driving seat with bears who eyes support at the $1.65 price mark.
Do Kwon expresses confidence in Terra restoration
Elsewhere, Terra creator Do Kwon is shutting out all the noise that came with the crash of Terra early last month. Terra forked away into a new chain, explicit of the algorithmic stable coin that caused the breakdown, with the pre-crash chain relegated to Terra Classic. A lot has transpired since then, significant being the increased legal questions surrounding Do Kwon and members of Terraform Labs.
In a recent report by the Wall Street Journal, Do Kwon has expressed “great confidence” in the ability to build Terra back to its former glory. The outlet reports that Do Kwon believes that reborn, the new chain could grow to surpass what Terra formerly was.
That is such high confidence and a bold claim given that the fall of Terra was disastrous, with UST and LUNA formerly having more than $40 billion in combined market value during their glory days. The LUNC token, previously LUNA, crashed from an all-time high of $120 on April 5 to $1.00 on May 11.
Developers are building, but there are skeptics
Regarding the chain’s resurgence course, Do Kwon noted that several developers have already committed to relaunching their decentralized applications on the new Terra chain. The Terraform Labs chief hopes that this would help contribute to an increase in the value of the new LUNA token. However, some have raised serious questions on why anyone would risk investing in LUNA again, having witnessed the cataclysmic breakdown of its former chain.
It’s not just that. There are also claims that Terra’s fall wasn’t particularly natural but an outright case of fraud, suggesting that Do Kwon cannot be trusted. Cory Klippsten, CEO of Swan Bitcoin, is one such who shares that the crash was intentional he’s lamented that from his behavior on social media, the Terra founder was clearly a fraudster.
Do Kwon has been keen to reject any suggestions of this nature, pointing out that there exists a distinction between “failing and running a fraud.” He explained that several prominent figures shared his vision for UST’s future, adding that his bets and optimism on the stable coin were backed by his belief in its “resilience and its value proposition.” He acknowledged that he has since lost his bets in it, but “[his] actions 100% match [his] words.”
Legal woes and investigations continue
Meanwhile, a huge legal cloud lingers around anything Terra – particularly in the US and South Korea, where investigators are trying to piece together the details behind Terra ‘s collapse. Investors in both countries felt the brunt, losing millions in bets on the Terra ecosystem.
In the US, a class-action lawsuit has been filed against Do Kwon and Terraform Labs for allegedly misleading investors with false information on assets of the Terra ecosystem, pushing them to buy UST and LUNA at the inaccurately high prices.
Most recently, a local news outlet in Korea reported that the country had banned individuals under current and former employ of Terraform Labs from leaving the country. Yonhap News said that about 15 persons had received restrictions on their travels. An official from the prosecutor’s office confirmed that the travel embargo had been enforced on “officials linked to the stable coin’s collapse.”
The individual did not confirm the proceedings of the investigations into the matter. All in all, even with the optimism that Kwon’s expressing, the journey back to ‘normalcy’ will be anything but smooth.
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