Terra’s reserve currency Luna has surged about 60% over the past 24-hours, following a crash that saw the digital asset lose almost 99% of its value.
This is amid prosecution faced by Terraform Labs’s founder and CEO Kwon Do Hyeong — prominently known as Do Kwon — over the collapse of Luna and stablecoin TerraUSD (UST).
Luna's 7-day performance, chart by CoinGecko
TechCrunch reported on May 20 that The Seoul Southern District Prosecutors’ Office has kicked off an investigation on Terraform Labs and assigned the case to its Financial and Securities Crime Joint Investigation Team.
In Singapore, The Straits Times wrote that the police are not investigating the local report lodged against Terraform Labs and Do Kwon.
The widely circulated report filed by a “concerned citizen” has claimed that they know over 1,000 Singaporeans who invested in UST and Luna, and is “seeking justice for all those who have lost money”. “It is not [okay] for an investment to be sold to retail investors who do not know better as a safe and stable currency,” the report added.
Meanwhile, Binance CEO Changpeng “CZ” Zhao clarifies that user funds are kept separate from the exchange’s operating funds. In an “ask me anything” (AMA) thread on the Reddit platform, Zhao explains that if Binance goes bankrupt, funds would be refunded to users before any shareholders.
“Funds are SAFU,” he added, referring to a popular meme on Binance’s user assurance.
A reply by Zhao on the Reddit AMA thread.
The asset management arm of Prudential Financial, PGIM, has found “very little” real-world evidence that cryptocurrencies deliver diversification versus mainstream assets; are effective inflation hedges; possess the intrinsic characteristics of a safe-haven asset; or advance environmental, social and governance objectives.
PGIM head of thematic research Shehriyar Antia said cryptocurrency may be a heroic quest to build a viable, decentralised peer-to-peer payment system. However, its pricing is based on speculative behavior, rather than a fundamental thesis around its value or utility.
“Furthermore, with little evidence to support it as an effective inflation hedge or safe-haven asset, we see no reason for cryptocurrencies to be a part of institutional portfolios,” he added.
Cover photo: Bloomberg