This week, the Luna crypto asset has re-appeared on major exchanges, rising from the dead after a catastrophic collapse burned investors and sent shockwaves throughout the crypto market.
Investors voted to revive the crashed Luna cryptocurrency but voted down restoration of the TerraUSD stablecoin, which fell from its peg to the US dollar to trigger the crash of itself and Luna. Terraform Labs' revived Luna (also known as "Terra 2.0") is best described as a "zombie coin" just shortly after its launch; resurrected but a withered shell of its former self. This is best reflected in the coin's unceremonious crash immediately following its return, with Terra 2.0 plummeting 63% since Saturday.
To make matters worse, cryptocurrency investors have soured on Luna and Terra after the stablecoin crash caused wider panic throughout the market, and many experts have become bearish on the revived blockchain's prospects. Even as Terra 2.0 is airdropped to investors of the coin, many are complaining of delays, and many more are finding that the value of their assets dramatically pales in comparison to their losses from the crash of what is now called "Luna Classic." In terms of recovery, Luna faces stiff competition from more established and remarkably more stable "Layer 1" blockchains such as Ethereum.
If that weren't enough to dampen Terra 2.0's prospects, Southern Korean regulators have begun to scale their probe into Terraform Labs. Korean authorities have sent subpoenas to all of the crypto company's staff, responding to complaints filed by 76 "victims" (presumably investors), according to allegations made by inside sources to Korean news outlet JTBC. According to those same sources, despite internal resistance by some within Terraform Labs, CEO Do Kwon forged ahead with the relaunch.
The Luna crash has underlined the high risks that come with the high rewards of cryptocurrency trading, even within ostensible "safe harbors" like stablecoins. While South Korea's probe may provide some justice to investors there, the lack of regulation or government action in the United States means that most American investors are more or less on their own.