One of the events that marked 2022 in the cryptocurrency market was the dramatic collapse of the Terra ecosystem. However, Terra managed to be reborn from the ashes, although not as strong as before. However, altcoin prices are now at great risk of falling, with the US suing Terra’s founder Do Kwon.
SEC lawsuit poses sell-off risk on two altcoins
cryptocoin.com As you follow on Friday, the US Securities and Exchange Commission (SEC) filed a lawsuit against Do Kwon, Terraform Labs and its affiliates. After that, the prices of ecosystem-related tokens Terra (LUNA) and Terra Classic (LUNC) witnessed a sudden drop. This shows that Do Kwon still has influence over LUNA as well as LUNC.
A few hours after news of the US SEC’s lawsuit against Do Kwon reached the community, the Terra (LUNA) price dropped from $2.01 to $1.80. Although the LUNA price is showing a partial recovery, it has not gained any upward momentum so far. Altcoin price is under selling pressure at press time and is trading at $1.9. Also, trading volume has dropped over 30% in the last 24 hours. This shows that the interest in LUNA among traders is decreasing.
Meanwhile, the Terra Classic (LUNC) price also fell during the same period. This is a bit interesting, as Terra founder Do Kwon and the Terra Classic community have previously claimed that the Terra Classic community and its developers are separate from Terra. However, with recent moves, Do Kwon still seems to have an influence on Terra Classic.
LUNC price dropped from $0.0001757 to $0.0001655 on February 17. However, it recovered better than LUNA and almost made up for its fall. At press time, the altcoin is trading at $0.0001729, up over 2.5% on a daily basis. The last 24-hour bottom and top are at $0.000168 and $0.0001735 respectively. Unlike LUNA, the trading volume also managed to recover a bit. However, due to the backlash to the SEC’s lawsuit, both tokens seem to remain at a large sell-off risk.
Why did the US SEC sue Terra founder Do Kwon?
The U.S. Securities and Exchange Commission (SEC) has sued Terraform Labs and its co-founder Do Kwon for planning a $40 billion securities fraud involving LUNA and Terra’s algorithmic stablecoin TerraUSD (UST).
Furthermore, the SEC alleges that Do Kwon and his company secretly transferred more than 10,000 BTC from the company and cashed some of the tokens through a Swiss bank. Meanwhile, Do Kwon withdrew over $100 million in fiat from a Swiss bank after the Terra-LUNA crisis.
