Luna Coin has a huge impact in the crypto world, and its dramatic price fluctuations and the resulting series of chain reactions have had a profound effect on the crypto market and even the entire financial market.

Luna Coin is the native token of the Terra blockchain platform, which experienced a rapid rise in 2021, with its price skyrocketing from less than $1 at the beginning of the year to $119.5 in April 2022, and its market capitalization once exceeding $40 billion, ranking it among the top ten cryptocurrencies by market value, becoming the third largest stablecoin, and being referred to as the 'Moutai of the crypto world'.

However, in May 2022, Luna Coin experienced a cliff-like collapse, with its price nearly falling to zero, plummeting over 99%. This event not only led to hundreds of thousands of investors facing liquidation but also indirectly brought down the entire virtual currency market, triggering a 'crypto Lehman crisis', which included bank runs, hedge fund liquidations, and the bankruptcy of virtual currency brokerages. As a result, the total market capitalization of the global cryptocurrency market shrank by more than $600 billion, severely undermining investor confidence.

Additionally, the collapse of Luna Coin also exposed the risks of algorithmic stablecoins, leading to questions about the mechanism and safety of this new type of stablecoin. At the same time, this incident prompted countries to strengthen their regulation of the cryptocurrency market, with the U.S. Securities and Exchange Commission filing charges against Terraform Labs and Luna Coin's main developer, Do Kwon, who ultimately had to pay a $4.5 billion fine to the SEC, among other penalties. The Luna Coin incident has become an important case in the history of the cryptocurrency industry, profoundly influencing future industry regulation and compliance requirements.