Introduction
Terra Luna Classic ($LUNC ) emerged in the aftermath of the Terra blockchain collapse in May 2022, an event that resulted in substantial financial losses and widespread regulatory scrutiny. The collapse of the ecosystem’s algorithmic stablecoin, TerraUSD (UST), led to severe devaluation of its sister token, LUNA, prompting the Terra community to fork the original blockchain. This fork gave rise to Terra Luna Classic (LUNC) and a newly established chain known simply as Terra (LUNA).
Terra’s Collapse and the Emergence of LUNC
In May 2022, TerraUSD (UST) lost its peg to the US dollar, triggering a rapid decline in the value of LUNA. This collapse wiped out nearly $45 billion in market capitalization within a week. In response, the Terra community voted to fork the blockchain, creating:
Terra Luna Classic (LUNC): The continuation of the original chain.
Terra (LUNA): A new blockchain with a revised token structure.
Despite the rebranding and restructuring efforts, LUNC remains highly volatile, influenced by ongoing legal proceedings and regulatory challenges.
Legal Actions Against Terraform Labs and Do Kwon
The collapse of Terra’s ecosystem attracted global regulatory scrutiny, leading to multiple legal actions against Terraform Labs and its co-founder, Do Kwon.
South Korea
Prosecutors launched a criminal investigation into Terraform Labs in May 2022, citing violations of capital markets law.
The Seoul Southern District Prosecutor's Office expanded its economic crimes division to focus on the Terra crisis.
United States
In February 2023, the U.S. Securities and Exchange Commission (SEC) charged Terraform Labs and Do Kwon with orchestrating a multi-billion-dollar crypto securities fraud.
The SEC alleged that Terraform Labs misled investors about UST’s stability and falsely claimed that Terraform’s blockchain was integrated into South Korea’s Chai app.
Singapore
A class-action lawsuit seeking $56.9 million was filed in Singapore, accusing Terraform Labs and Do Kwon of fraudulent activities related to the Terra collapse.
Recent Developments
Bankruptcy Proceedings
In January 2024, Terraform Labs filed for Chapter 11 bankruptcy in the United States, reporting assets and liabilities between $100 million and $500 million.
By September 2024, Terraform Labs secured court approval to wind down operations following a settlement with the SEC.
Trial and Extradition
In April 2024, a New York jury found Do Kwon and Terraform Labs liable for civil fraud, supporting the SEC’s allegations.
In December 2024, Montenegrin authorities extradited Do Kwon to the United States, where he faces multiple fraud charges, including money laundering.
Current Market Status of LUNC
As of March 14, 2025, Terra Luna Classic (LUNC) is trading at approximately $0.00006004, reflecting a 0.02532% decline from the previous close. The day's price movement has seen:
High: $0.00006237
Low: $0.00005951
Conclusion
The future of LUNC remains closely tied to the ongoing legal proceedings against Do Kwon and Terraform Labs. While the community continues efforts to sustain the ecosystem, regulatory scrutiny and legal challenges continue to shape investor sentiment and market performance. As developments unfold, market participants should remain vigilant and monitor regulatory updates that may impact the long-term trajectory of LUNC.
