LBank Co-Founder Claims LUNA Crash Caused Current Crypto Winter
- The LBank co-founder claims that the crypto winter was caused by the collapse of Luna.
- Johnason Chan believes Terraform Labs shut down its services to avoid taxes.
- Johnason Chan clarifies that all of this has yet to be confirmed and is just hearsay at this point.
Johnason Chan as co-founder of Lbank claims that the extreme crypto market conditions currently prevailing were caused by the collapse of Terraform Labs’ Terra (LUNA) and TerraUSD (UST).
By sharing what he thought about the current crypto winterJohnason Chan blamed Terraform Labs and their notorious algorithmic stablecoins and cryptos.
Notably, the then-TerraUSD or UST collapsed as investors fled the stablecoin after prices of most digital currencies plummeted in May. In its demise, UST brought with it its sister token Luna.
After the implosion of LUNC and USTC, the room was surrounded by all sorts of digital asset panics. Some crypto analysts believe the incident dragged down an already bearish market, which is still being felt today.
According to information provided to CQ, Johnason Chan echoed this sentiment that Luna caused many investors to lose money, ushering in the crypto winter.
Johnason Chan also believes that Terraform Labs suspended its services to avoid taxes. Interestingly, several reports have also claimed that Do Kwon’s Singapore-based company closed its South Korean branch last year, allegedly to evade taxes.
While the real reasons for Terraform’s closure have yet to emerge, South Korea’s national tax agency has slapped the company with a hefty $78 million fine for tax evasion.
Finally, the board of LBank speculates that Terraform is to blame for the current bearish market because Do Kwon’s company intentionally lowered Luna’s price, as they are aware that liquidity was huge and it was easy to short Luna.
However, Johnason Chan clarifies that all of this has yet to be confirmed and is only hearsay at this point.
The Terra blockchain has since been officially halted and UST has remained pegged to the US dollar. Meanwhile, the original Luna has been rebranded as the Terra Classic, which is nearly 90% off its all-time high of $18.87.
Despite the LUNA crash, several exchanges showed their support for LUNA 2.0. LBank was one of the major crypto exchanges to welcome the launch of Terra Classic (LUNC). On May 26, Do Kwon himself accepted LBank’s support for the launch of Terra 2.0 and the subsequent token airdrop.