Terraform Labs was dissolved days before LUNA price crash

Questions raised at the timing of the dissolving of Terraform Labs

Terra cryptocurrency logo on the screen of smartphone in mans hand with downtrend on the chart on a red light background                                 
Reports have emerged that Terraform Labs was dissolved just days before the collapse of LUNA and depegging of UST – Photo: Alamy

It has emerged that a few days prior to the collapse of Terra (LUNA) and depegging of its stablecoin TerraUSD (UST), its founder Do Kwon closed Terraform Labs and organised the liquidation of two South Korean offices.  

The liquidation was first reported by South Korean news outlet Digital Today, after obtaining the information from the country’s Supreme Court Registry Office.

The documents said that Do had initiated the liquidation of two South Korean offices and the closing down of Terraform Labs, the company behind the Terra blockchain.

A general shareholder meeting on 30 April agreed to dissolve both the Busan headquarters and offices in Seoul.

The document read: “On 4 May, Terraform Labs Korea’s headquarters was dissolved and on 6 May the Seoul branch was dissolved.”

Due to the timing of these documents it has raised eyebrows as on the 9 May LUNA and UST started to drop.

Terra currently trying to make amendments to its ecosystem

However, since the crash Do has set up a forum to help form a revival plan. In it, he stated this is “a chance to rise up anew from the ashes”.

Also, he has said he wants to create a new Terra blockchain but without the algorithmic stablecoin or UST. The old blockchain will be called Luna Classic (LUNC) and the new Luna (LUNA).    

The new LUNA will be airdropped to LUNC stakers, LUNC holders, UST holders and essential app developers of Terra Classic.

Do has also outlined the planned timeline for this revival plan, which only spans 22 days, with the new network launch set for 27 May.

The motivation for the plan, according to Do, is that “the Terra ecosystem and its community are worth preserving” and he wanted to give the chance for those in the Terra community to vote on certain amendments he has suggested.

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