Do Kwon’s Legal Troubles
Do Kwon, the head of Terraform Labs, is reportedly considering a guilty plea in connection with a U.S. criminal investigation related to the catastrophic downfall of the $40 billion Terra ecosystem in 2022. This information comes from a Bloomberg report dated August 11, which cites unnamed sources close to the situation. If finalized, this plea would signify a significant development in Kwon’s ongoing legal troubles, which have cast a long shadow over both the Terra (LUNA) and Terra Luna Classic (LUNC) cryptocurrencies for over two years.
Plea Negotiations and Charges
Negotiations between Kwon’s defense team and U.S. prosecutors are underway regarding the potential terms of a plea agreement. Kwon has been in American custody since his extradition from Montenegro, where he was apprehended in March 2023 after allegedly using forged documents for travel. He is facing serious charges concerning fraud and securities violations linked to the collapse of TerraUSD, an algorithmic stablecoin whose failure ignited a widespread market downturn in May 2022.
Although Terraform Labs declared bankruptcy at the beginning of 2023, they continue to maintain their innocence regarding any misconduct. Nevertheless, Kwon is facing mounting pressure from both U.S. and South Korean authorities pursuing separate legal actions against him. It’s important to note that a plea deal in the U.S. may not resolve the charges levied against him overseas, but it could help expedite legal processes domestically.
Market Impact and Current Trading Status
The turbulent legal landscape has resulted in a cautious approach among investors, contributing to stagnant market sentiment surrounding LUNA and LUNC. Currently, LUNA is trading at approximately $0.1602, hovering just above its 20-day moving average of $0.1612 but falling short of the upper Bollinger Band resistance of $0.1761. The relative strength index (RSI) suggests neutral momentum at 44.75. Within the past week, LUNA has fluctuated between $0.148 and $0.169. Interestingly, while trading volume has surged by 39.50%, open interest has decreased by 6.16%, hinting at cautiousness from leveraged traders. Should LUNA successfully break through $0.169, it could target $0.176 and potentially $0.190. Conversely, a drop below the critical support level of $0.158 could see prices retreat toward $0.148.
On the other hand, LUNC is currently priced at around $0.00006116, just shy of its upper Bollinger Band resistance at $0.00006464, while sitting near its 20-day moving average of $0.00006060. The RSI indicates a slight recovery from oversold conditions at 46.37. Over the last week, LUNC’s trading range has been between $0.00005686 and $0.00006417. Although there has been a 3.20% uptick in trading volume and a substantial 17.18% increase in derivatives volume, open interest has declined by 3.62%. If LUNC manages to push past $0.00006417, it may aim for the $0.00007000 mark; however, failure to hold the current support may lead to a retreat towards the $0.00005700 level.
