Terra (LUNA) completely collapsed last week, but investors are still trading the token even though it lost 99 percent of its value, going from $62 on May 9 to less than a cent on May 14.
On May 20, LUNA was still the most-searched-for cryptocurrency on CoinMarketCap.
As of right now, the Defi asset is trading at $0.00014, an increase of 8.45% in the last 24 hours and 281.60% in the last week. It has a market cap of $915 million.
Investigators look into Do Kwon
Even more interesting is that the token is on the rise after the recent collapse of the Terra stablecoin protocol and as South Korean officials set up an emergency financial crimes section to look into the Terra collapse. Do Kwon, who came up with the protocol, has been fined $78 million by the government for tax fraud.
The government authorities are interested in figuring out why Terra’s dollar-pegged stablecoin, UST, lost its peg on May 9. Within four days of the crisis, the market for stablecoins lost $18 billion, Terra’s TVL lost $26 billion, and, as was already said, the value of Terra’s network token, LUNA, dropped from $65 to a fraction of a penny.
South Korea’s Financial Services Commission and Financial Supervisory Service have both asked local cryptocurrency exchanges for information.
The information that is being asked for includes the number of LUNA and UST trades and the number of investors who have lost money because of the market drop. One local exchange operator told Yonhap, “I think they did it so they could come up with ways to protect investors in the future.”
Terra was found to have not paid taxes.
Tax authorities in Korea have found Terra’s parent firms guilty of avoiding corporate and income taxes. To avoid paying taxes, the Korean National Tax Service said that Kwon had moved LUNA from its software firm, Terraform Labs, to Singapore’s Luna Foundation Guard (LFG), a non-profit organization created to help Terra.
For the $3 billion in Bitcoin LFG acquired and sold in a last-ditch bid to salvage UST, Do Kwon was penalized $78 million by the tax department and may be fined more.
While Do Kwon and Daniel Shin were requested to pay $100 million in taxes by the NTS in December, they declined since Terraform Labs is domiciled in Singapore. However, according to the NTS, all of their operations are controlled from South Korea.
Whatsmore, it was only a few days before the collapse of Terra that Do Kwon attempted to dissolve Terra’s Korean entities. There is speculation among onlookers as to how long before the chain crumbled Do Kwon had been prepared for Terra’s downfall
Meanwhile, Kwon is being sued by some of the 200,000 people in Korea who invested in either LUNA or UST over the failed protocol.
The local legal company LKB & Partners, as well as the staff of the law firm, are included as plaintiffs in a lawsuit that was reportedly filed on behalf of investors who suffered financial losses.