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‘A Dark Day for Crypto’ — A Deep Dive Into the Obliterated Terra Token Ecosystem and Damaged Apps

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‘A Dark Day for Crypto’ — A Deep Dive Into the Obliterated Terra Token Ecosystem and Damaged Apps

'A Dark Day for Crypto' — A Deep Dive Into the Obliterated Terra Token Ecosystem and Damaged Apps

Following a few days of carnage, the two leading crypto assets built on top of the Terra blockchain have plummeted to significant lows. LUNA has dropped to $0.00000100 per coin and the once-stable coin terrausd (UST) hit a low of $0.044 per unit. After temporarily halting the Terra blockchain and restarting it, the team has once again halted block production at block height 7,607,789. The team restarted the chain again at 8:46 a.m. (ET) and disabled onchain swaps.

Do Kwon’s ‘Amusing Morning’ of De-Pegging Jokes Becomes a Scary Reality

Five days ago people started to get concerned about the Terra-based stablecoin terrausd (UST) as a slight deviation from the $1 parity took place. At that time, rumors and speculation concerning Terra’s stablecoin failing started to spread like wildfire. However, the Terraform Labs co-founder Do Kwon shrugged it off as an “amusing morning” and said that Terra detractors were now “all poor.” Kwon continued to say that UST’s de-pegging at the time was no big deal, and the Terra community believed it as well.

So, is this $UST depeg in the room with us right now?

No?

I prescribe 24 hours of pegging over the next 7 days pic.twitter.com/GsBss7ACit

— Do Kwon 🌕 (@stablekwon) May 8, 2022

Then the decentralized exchange (dex) Curve Finance noticed that there was significant terrausd (UST) selling taking place on the trading platform. “Yesterday, someone started selling UST en masse, so it started to depeg,” the Curve Twitter account said. “However, that was met with a great resistance, so the peg was restored. To get enough USD for that, a lot of ETH and stETH were sold also.” The Terra team seemed to take things more seriously at this point and the Luna Foundation Guard (LFG) explained that it was loaning $1.5 billion in bitcoin (BTC) and terrausd (UST) to professional market makers to defend the peg.

UST De-Pegging Transforms Into a Nightmare for Terra, Lunatics, and the Project’s Investors

The community was a lot more shaken at this point, and Anchor Protocol started to see significant withdrawals. Anchor Protocol was once the third-largest decentralized finance (defi) protocol with close to $18 billion locked just before the chaos started. From May 5, up until today, Anchor’s total value locked (TVL) slipped from $18 billion to today’s $410 million. Another defi protocol that had exposure to Terra’s native token LUNA was the liquid staking application Lido. On May 6, Lido had more than $18.6 billion and today, Lido now has around $8.95 billion locked.

'A Dark Day for Crypto' — A Deep Dive Into the Obliterated Terra Token Ecosystem and Damaged Apps

The once-stable token terrausd (UST) is currently changing hands for $0.094 per coin after reaching a high of $0.84 the day prior. UST sunk to a low of $0.044 per unit roughly 11 hours before writing this article. While many digital currency trading platforms had shut off Terra-based wallets, there are a few exchanges still allowing UST deposits. Presently, FTX is the most active UST exchange on Friday and the top trading pair with UST is tether (USDT). Tether represents 37.78% of all UST trades and is followed by BUSD (31.59%), USD (29.83%), EUR (0.46%), and USDC (0.29%).

Terra’s native token LUNA has suffered even more so than UST, as it is trading well below a U.S. penny. LUNA’s 24-hour price range has been between $0.04333980 and $0.00000100 per unit. Presently, it is not easy to sell LUNA as most exchanges are not accepting deposits from the Terra chain. FTX today is LUNA’s most active exchange and BUSD is the coin’s most active trading pair with 73.64% of all LUNA swaps. BUSD/LUNA pairs are followed by USD (13.60%), USDT (10.32%), and BTC (0.89%).

Binance Founder Says He’s Very Disappointed With How the UST/LUNA Incident Was Handled, Terra Blockchain Temporarily Shuts Down Again

Following the suspension of LUNA and UST on Binance, the trading platform’s founder Changpeng Zhao, commonly known as CZ, said he was disappointed in the Terra team.

“I am very disappointed with how this UST/LUNA incident was handled (or not handled) by the Terra team,” CZ tweeted on Friday. “We requested their team to restore the network, burn the extra minted LUNA, and recover the UST peg. So far, we have not gotten any positive response, or much response at all. This is in sharp contrast to Axie Infinity, where the team took accountability, had a plan, and were communicating with us proactively. And we helped.”

Binance book is empty. Never seen that before pic.twitter.com/ez4ZZT9sDR

— Hasu⚡️🤖 (@hasufl) May 10, 2022

On Thursday, the Terra team halted the blockchain and applied a patch to the codebase before restarting. After the team restarted the network, at 10:13 p.m. (ET) on Thursday evening, the team once again stopped block production. “The Terra blockchain has officially halted at block 7607789,” the team tweeted. “Terra Validators have halted the network to come up with a plan to reconstitute it.” Then at 8:46 a.m. (ET) on Friday morning, the team announced the chain was up and running again with some features disabled.

“The Terra blockchain has resumed block production,” the Terra team explained. “Validators have decided to disable on-chain swaps, and IBC channels are now closed. Users are encouraged to bridge off-chain assets, such as bETH, to their native chains. Note: Wormhole bridge is currently unavailable.” After the tweet, the team said the Wormhole bridge was available at 9:09 a.m. (ET).

Terra Community Contemplates Restoring a Snapshot of the Chain Prior to Attack, Every Terra Token Built on the Network Suffered Immense Losses

Furthermore, discussions about restarting the project have started to emerge, and a Terra advocate has been talking about taking a snapshot of the chain before the attack.

“The community is deciding on a new [Terra network], between restoring a snapshot prior to attack, removing TFL, fully collateralizing UST, and drafting [and] deliberating new mechanisms for LUNA. We must salvage the remaining value in the ecosystem [and] community and rebuild the right way,” the Terra advocate dubbed ‘Stablechen’ told his Twitter followers. In addition to LUNA and UST, tokens built on top of Terra have all suffered a great deal. The token anchor (ANC) has lost 93% against the USD this week, and orion money (ORION) lost 92.4% in seven days.

Do Kwon: “95% are going to die [coins], but there’s also entertainment in watching companies die too”

8 days ago. Ironic. pic.twitter.com/fEQMZIyd9a

— Pedr🌐 (@EncryptedPedro) May 11, 2022

Moreover, Terra also had a number of tokens that represented specific fiat currencies like the Korean won (KRW). Terra’s terrakrw token has lost 84.4% in the last seven days, and the same can be said for Terra’s Australian dollar token. Terra even minted the IMF’s Special drawing rights (SDR) currency and synthetic stock tokens as well, using Mirror Finance. Every single token built on top of Terra’s blockchain has been shaken to the core and most are simply valueless. Presently, the web portal mirror.finance cannot be reached as the site is down, and there’s roughly $39.17 million locked into the application.

In a note sent to Bitcoin.com News, Dan Ashmore, the crypto data analyst at Invezz.com, explains that the Terra blockchain fallout brought a lot of pain and grief.

“This is a dark day for crypto,” Ashmore said in a statement. People have lost livelihoods, hundreds of platforms have gone belly up, and years of building vanished. College funds, life savings, leveraged gambles – there is a lot of pain out there. Regulators are watching, and this is undoubtedly a step back. Obviously, it is also a failure of the decentralised and uncollaterised stablecoin. A tremendous financial experiment has gone haywire and taken a big chunk of the market with it. Be safe.”

What do you think about the issues Terra has seen during the last week? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Korean Police Ask Crypto Exchanges to Freeze Luna Foundation Guard’s Assets

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Korean Police Ask Crypto Exchanges to Freeze Luna Foundation Guard’s Assets

Korean Police Ask Crypto Exchanges to Freeze Luna Foundation Guard's Assets

The South Korean police have reportedly launched an investigation into possible embezzlement involving an employee of Terraform Labs. To prevent fund transfers, the police have requested crypto exchanges to freeze the Luna Foundation Guard’s accounts.

Embezzlement Investigation and Asset Freeze

The Seoul Metropolitan Police Agency’s Cybercrime ​​Investigation Unit announced Monday that it has launched an investigation into possible embezzlement by an employee of Terraform Labs, local media reported.

An official from the Seoul Metropolitan Police Agency was quoted by Chosun as saying:

We have received information that there is a person suspected of embezzling corporate funds who is believed to be an employee of Terraform Labs.

The police received reports of the alleged embezzlement in the middle of this month and have been looking into the case. As part of the investigation, the police plan to check the details of cash and crypto transactions of Terraform Labs and the Luna Foundation Guard (LFG).

The police explained that there is evidence that embezzled funds had flowed into the Luna Foundation Guard’s accounts. The cybercrime unit has therefore requested major domestic cryptocurrency exchanges, such as Upbit and Bithumb, to “urgently” freeze the accounts belonging to the Luna Foundation Guard to prevent withdrawals of funds held at crypto exchanges.

However, the police’s freeze request is not a compulsory matter according to Korean laws and regulations but a matter that needs to be arbitrarily performed by each crypto exchange. Therefore, it has not been confirmed whether the freeze requests have been carried out, the publication conveyed.

Cryptocurrency terra (LUNA) and stablecoin terrausd (UST) collapsed earlier this month after UST lost its peg to the U.S. dollar.

Following the collapse, the Korean government launched an emergency investigation into the two coins and met with representatives of the country’s top crypto exchanges to discuss measures to prevent similar incidents from happening.

Last week, a number of victims filed a lawsuit against Terraform Labs CEO Kwon Do-hyung (aka Do Kwon) with the Seoul Southern District Prosecutors Office on charges of violating the Act on the Aggravated Punishment of Specific Economic Crimes (fraud) and the Act on the Regulation of Similar Receipts.

In addition, Do Kwon dissolved Terraform Labs Korea days before the collapse of LUNA and UST. While many suspected foul play, Kwon claimed that the timing was just “coincidental.” He also claims that his company does not owe the Korean government any taxes.

What do you think about this case? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Registration For The Upcoming VERSE Token By Bitcoin․com Is Now Open

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Registration For The Upcoming VERSE Token By Bitcoin․com Is Now Open

press release

Registrations are now open for the VERSE token sale, which will begin in the later part of June 2022. Interested parties who register can participate in the token sale immediately upon launch.

Miami, Florida – May 23rd, 2022 – VERSE is the rewards and utility token distributed to holders who participate in the Bitcoin.com ecosystem. Bitcoin.com is a global leader in introducing newcomers to cryptocurrency and is the go-to platform for educational resources, news, and more. Bitcoin.com’s ecosystem includes 30 million wallets and more than five million monthly active users across various products and services.

The VERSE token will reward users who engage in buying, selling, spending, swapping, and staying informed about cryptocurrency. Rewards will be allocated by interacting with the Verse DEX, staking VERSE, cashback paid in VERSE, and using VERSE as collateral in various lending pools. Additionally, token holders will receive access to exclusive products and services.

VERSE is a cross-chain token using the ERC-20 token standard on the Ethereum blockchain. The Verse team will actively explore opportunities to expand the token into low-fee Ethereum Virtual Machine-compatible networks to provide an optimal user experience.

The VERSE supply is fixed at 210 billion tokens, distributed over seven years through a block-to-block approach. A further breakdown looks as follows:

  • 10% sold during Sale A (completed in May 2022)
  • 6% being sold during Sale B (coming in June 2022)
  • 15% allocated to the team
  • 35% set aside for ecosystem incentives
  • 34% will be used for funding future development of Verse and its ecosystem

The first token sale raised $33.6 million last month from notable market participants such as Blockchain.com, KuCoin, and Digital Strategies along with thought leaders like Roger Ver, Jihan Wu, and David Wachsman.

“We were honored to see such outspoken support during our first token sale round. Furthermore, we could not be more excited about bringing our second token sale to the public and providing more people with access to VERSE. This new utility token marks a crucial milestone for the Bitcoin.com ecosystem. It will enable us to enhance the mainstream appeal of cryptocurrency and blockchain through our buy/sell services, news coverage, and educational tools” said Dennis Jarvis, CEO Bitcoin.com.

To participate in the upcoming VERSE token sale, interested parties need to register on the Verse website. They will be the first to know when the VERSE token sale is live.

Registrants need an Ethereum wallet – such as the Bitcoin.com Wallet – to receive the VERSE tokens. Payment for the token sale is possible with Bitcoin, Bitcoin Cash, Ethereum, USDT, and USDC.

The Verse community already counts over twenty-five thousand participants combined across Telegram and Discord. VERSE tokens will be minted following the conclusion of the Verse public sale in July.

The VERSE token sale is not available to U.S. purchasers.

Bitcoin.com

Bitcoin.com is your premier source for everything Bitcoin-related. We can help you buy bitcoins and choose a bitcoin wallet. You can also read the latest news, or engage with the community on our Bitcoin Forum. Please keep in mind that this is a commercial website that lists wallets, exchanges and other Bitcoin-related companies.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Popular Radio Presenter Suspended for Alleged Ties to Bitcoin Scam

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Popular Radio Presenter Suspended for Alleged Ties to Bitcoin Scam

South Africa’s national broadcaster has suspended one of its employees that is accused of convincing unsuspecting people, including pensioners, to invest in a cryptocurrency scam. More than 100 people are believed to have fallen victim to promises of very high returns to investors in the bitcoin investment scheme.

300% Return on Investment

The South African state broadcaster recently suspended one of its radio presenters, Sebasa Mogale, after a media exposé suggested he may have been part of a cryptocurrency scam outfit that reportedly promised a 300% return on investment.

The decision to suspend the popular broadcaster, who also plays a role in South Africa’s popular television series Skeem Saam, was made after an investigative report by the media outlet Carte Blanche identified him as one of the masterminds behind the scam that allegedly fleeced more than 100 people.

Reports of Mogale’s suspension were confirmed by Gugu Ntuli, the South African Broadcasting Corporation (SABC) group executive responsible for corporate affairs and marketing. In a statement, the executive said:

Thobela FM has taken a decision to unschedule Sebasa Mogale, (Ntshirogele) Afternoon Drive presenter, following the Carte Blanche exposé. Mr Mogale is being afforded an opportunity to resolve the issues raised in the recent broadcast which pertain to his personal business dealings involving cryptocurrency.

Ntuli added that the SABC will “leave no stone unturned” in its own probe into Mogale’s role in the scam.

A Confidence Trickster

According to an exposé by Carte Blanche, Mogale had used his celebrity status to lure some listeners of his radio show to invest. The media outlet’s report said investors with no training in personal finance management had “cashed in their pensions and savings policies.” However, in the end, Mogale’s promises turned out to be empty.

“But for at least 140 people the man they trusted to guide them through the crypto maze appears to have been little more than a confidence trickster,” reads part of Carte Blanche’s summary of the exposé.

Following news of Mogale’s suspension, some of the victims of the scam have come forward to reveal their losses. Sello Bonoko is quoted in another report explaining he became a victim after he listened to Mogale’s bitcoin investment pitch that “sounded convincing.” He also said he trusted Mogale’s promises primarily because these were made on national radio. Bonoko said he lost more than $14,500 (R230,000).

Meanwhile, a spokesman for the South African police is quoted in the report telling Mogale’s victims to file reports with law enforcement. He said the police can only act after formally receiving the complaints.

What are your thoughts on this story? Tell us what you think in the comments section below.

Terence Zimwara

Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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