LUNA and LUNC Decline as Do Kwon Considers Guilty Plea in $40B Case
The founder of Terraform Labs, Do Kwon, is reportedly negotiating a guilty plea in a U.S. criminal case related to the $40 billion collapse of Terra.
Summary
- Do Kwon may be inclined to plead guilty regarding the $40B Terra ecosystem collapse, as stated by Bloomberg insiders.
- Prices of LUNA and LUNC have dropped as investors assess potential legal and market implications.
- The legal proceedings come amid increased global scrutiny, with Kwon having already been convicted in Montenegro and facing extradition requests.
According to an August 11 Bloomberg report citing knowledgeable sources, Terraform Labs founder Do Kwon might plead guilty in a U.S. criminal case concerning the collapse of the $40 billion Terra ecosystem in 2022.
This development represents a significant turning point in a widely publicized legal struggle that has impacted the Terra (LUNA) and Terra Luna Classic (LUNC) tokens for over two years.
Do Kwon’s escalating legal challenges
Insiders informed Bloomberg that discussions are ongoing between U.S. prosecutors and Kwon’s legal representatives regarding a possible plea agreement, though details remain undecided. Following his extradition from Montenegro, where he was arrested in March 2023 for allegedly using counterfeit travel documents, Kwon has been in U.S. custody.
He is facing charges of fraud and securities violations related to TerraUSD, the algorithmic stablecoin whose fall precipitated a market-wide selloff in May 2022.
Terraform Labs, which declared bankruptcy in January, has denied any wrongdoing. However, the legal challenges against Kwon have intensified, with U.S. and South Korean authorities pursuing concurrent criminal cases. While a potential plea agreement may not resolve charges internationally, it could expedite proceedings in the U.S.
Due to ongoing legal and regulatory hurdles, investor sentiment remains subdued, with both LUNA and LUNC trading near critical technical levels.
LUNA Technical Overview
LUNA is currently trading at $0.1602, slightly above the 20-day moving average of $0.1612 but below the resistance level of $0.1761 set by the upper Bollinger Band. The relative strength index indicates neutral momentum at 44.75.
In the past week, the price has been consolidating between $0.148 and $0.169. Trading volume has surged by 39.50% in the last day, while open interest has decreased by 6.16%, indicating a cautious stance among leveraged traders.
A sustained breakout above $0.169 might target $0.176 and $0.190, whereas a drop towards $0.148 could happen if the $0.158 support level fails.
LUNC Technical Overview
LUNC is trading at $0.00006116, just below the upper Bollinger Band resistance of $0.00006464 and near its 20-day moving average of $0.00006060. A modest recovery from oversold levels is suggested by the RSI, currently at 46.37.
The 7-day trading range has been between $0.00005686 and $0.00006417. Trading volume has increased by 3.20%, and derivatives volume has risen by 17.18%, while open interest has fallen by 3.62%. A price breach above $0.00006417 could see it reaching $0.00007000. If rejected, the price may revert back to the $0.00005700 area.