Almost three weeks ago, two cryptocurrencies in the market crashed and the impact was devastating to say the least. The broader crypto market saw losses of about $500 billion because of the crash and countless investors lost their entire life savings. There was a call for launching a criminal investigation into the company that was responsible for it all and there was also talk of introducing regulations for the overall space. However, not it appears that the team behind the two cryptocurrencies that resulted in the crash are once more active. Terraform Labs, which launched TerraUSD and Luna, began trading a new coin on Saturday.
Its previous two cryptocurrencies saw their values decline to almost zero in the market, but it is now introducing the Luna 2.0 as part of its revival strategy. The founder of Terraform Labs, Do Kwon announced the new crypto and said it was their way of rising from the ashes. The new coin will replace the old one and use the same trading ticker LUNA. Some new tokens will be given for free to some investors who lost their investments in the previous coins from Terraform Labs and the company will determine the ratio.
Meanwhile, people will still be able to trade the old Luna coin, but it has now been renamed Luna Classic. Crypto exchanges have listed it as LUNC. As for the new one, it had a rocky start because in the first hours of trading, it lost almost 75% of its value. But, it did manage to regain some of it in the next few days. The coin’s value was just about $8.50 as of Tuesday evening. This is about half its starting price. Regardless, crypto investors, analysts and critics have fiercely criticized the release. According to them, this simply highlights a big problem associated with the crypto market.
Essentially, companies are free to sell what they want because they do not have to worry about enforcement or regulation and this means that everyday investors will be at risk. They said that it was the small investors who would fall for these promises and would suffer from the consequences, highlighting the failure of regulators. A spokesperson for Terraform Labs stated that massive support from the Luna community had prompted them to introduce the new coin and they were looking forward to the future. Kwon had launched Terraform Labs back in 2018 with the intention of transforming financial systems.
The engineer from Stanford University had launched the Luna coin in the same year. His company began selling TerraUSDin 2020 and labelled it as a stablecoin. But, as opposed to other stablecoins, this one was riskier. This is because it wasn’t pegged to a reserve asset as the rest. Instead, the stablecoin was able to maintain its value via an algorithm that connected it to the supply of Luna. Luna had seen an increase in value for a while, but early May saw investors dumping the TerraUSDstablecoinand this also resulted in the downfall of Luna.