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Terra fiasco triggers bigger backstop for TRON’s stablecoin

Following the total collapse of Terra’s algorithmic stablecoin in May, TRON this morning announced a plan to significantly increase the amount of capital backing up its own stablecoin. USDD — at first a near-carbon copy of Terra’s algorithmic stablecoin UST — arrived on the TRON blockchain on May 5. Initially designed to maintain its peg to the US dollar algorithmically, albeit with some backing, USDD will now be overcollateralized, according to TRON founder Justin Sun. A reserve comprised of cryptocurrencies and …

Korean prosecutors summon all Terraform Labs employees: JTBC

Prosecutors in South Korea have summoned all employees of Terraform Labs to investigate the collapse of TerraUSD, the stablecoin known by its UST ticker, according to a report from local television network JTBC on Saturday. Specifically, the Seoul Southern District Prosecutors Office’s joint financial and securities crime investigation team has summoned Terraform employees, JTBC reported, without citing any sources. One unnamed employee, known to have been involved in the initial development of the Terra blockchain in 2019, has reportedly already …

Crypto exchanges signal support for Terra’s ‘rebirth’

Crypto exchanges are throwing their weight behind Do Kwon’s audacious plan to raise Terra from the ashes of a devastating collapse earlier this month. In the last 12 hours, Huobi, Bitfinex and Bitrue have all tweeted their intention to support new versions of Terra and its native token LUNA. On his own Twitter, Terraform Labs CEO Do Kwon retweeted posts from each exchange as evidence of support for Terra 2.0. He also retweeted a post from Sam Bankman-Fried’s FTX — which has …

Korean police seek freeze on Luna Foundation Guard assets: KBS

Police authorities in South Korea are taking action to freeze assets tied to the non-profit group Luna Foundation Guard, according to KBS, the country’s national broadcaster. Per the publication, the Seoul Metropolitan Police Agency asked multiple exchanges to block Luna Foundation Guard (LFG) from withdrawing any corporate funds. However, the exchanges are not bound by law to do so, meaning that whether or not those actions will be carried out is unclear, according to KBS. Police said that they intervened …

Lawsuits aimed at recouping UST/Luna losses test uncharted waters

Quick Take A major South Korean law firm, LKB & Partners, is suing Do Kwon and co-founder Daniel Shin on behalf of five investors. Other investors are also organizing online to launch their own lawsuits; we may end up seeing cases centered around whether TFL represented its products and the risks of investing accurately. This feature story is available to subscribers of The Block News Plus. You can continue reading this News Plus feature on The Block.

Do Kwon amends Terra 2.0 proposal during the vote on it

Terraform Labs CEO Do Kwon has amended his proposal to revive the Terra blockchain — in the middle of a vote on whether it should be implemented.  After the implosion of the TerraUSD (UST) stablecoin, Terraform Labs CEO Do Kwon suggested a “rebirth” plan in which he proposed creating Luna (LUNA) 2.0 tokens on a new blockchain. Today he amended the proposal despite the fact the original plan is currently going through an on-chain vote. While this so-called “rebirth” proposal …

Delphi Digital admits ‘we were wrong’ on Terra stablecoin risks

Crypto-focused research and investment group Delphi Digital has published a post-mortem on the losses inflicted by last week’s collapse of TerraUSD (UST) algorithmic stablecoin, concluding that it “always knew something like this was possible.” “We understood the risks of the algorithmic model upfront and sought to be transparent about them throughout; however, it’s clear we miscalculated the risks,” Delphi wrote in a blog post late Wednesday. “To the vocal critics of Terra’s algorithmic design — you were right and we …

Pantera Capital cashed out 80% of its Terra investment before UST crash

Pantera Capital, one of the high-profile backers of Terraform Labs, cashed out nearly 80% of its Terra (LUNA) investment well before TerraUSD (UST) collapsed last week. “The market has been fairly frothy over the last year and thus we’d exited the majority of our position before any of this happened,” Joey Krug, co-chief investment officer at Pantera Capital, told The Block. “Roughly 80% over the last year, fairly gradually over time.” Pantera Capital invested at least twice in Terraform Labs …

Galaxy’s Mike Novogratz talks Terra collapse in new shareholder letter

Mike Novogratz, the billionaire CEO of crypto investment manager Galaxy Digital, opined on the recent crisis in the Terra blockchain ecosystem, which saw the market collapse of both the LUNA token as well as the algorithmic stablecoin UST.  The shareholder letter penned by Novogratz comes days after Galaxy released an update on its liquidity position. Galaxy is an early backer of Terraform Labs, the developer of the Terra blockchain, having taken part in a $25 million funding round announced in …

Major Korean law firm decides to sue Do Kwon after UST collapse

LKB & Partners, one of the top law firms in South Korea, has decided to sue Terraform Labs founder and CEO Do Kwon after the sudden collapse of TerraUSD (UST) last week, Korean media reported on Wednesday. LKB will file the case against Kwon, a Korean national, on behalf of ordinary investors to the Seoul Metropolitan Police Agency, according to a report in the Munhwa Ilbo newspaper. Some of LKB’s employees may also join the case since they lost money …