Terra (LUNA2) reversed a portion of the losses this June 9, as its price per token rose by 67.5% that day, causing many traders to be caught off-guard with their perpetual swap positions.
LUNA2 traders are shorting it
In detail, the price of LUNA2 increased from $2 to $3.58. Coinglass shows that the volatile intraday move coincided with the liquidation of approximately $4 million worth of LUNA2 trades on Binance and Bybit, including $2.46 million worth of short positions.
Interestingly, LUNA2 funding rates on Binance and Bybit remain negative, indicating that traders remain short despite the price rally.
Shadow Wallet FUD
The negative sentiment in the LUNA2 market has largely been strengthened by its poor performance in recent weeks, led by Terra, an algorithmic stablecoin project whose native token is LUNA Classic (LUNAC; formerly known as LUNA). goes down) and TerraUSD (UST) collapsed in May. ,
TerraForm Labs (TfL), the firm behind the Terra blockchain, formed LUNA2 from the ashes of the $40 billion project. It distributed the modified tokens among investors who had suffered losses from their LUNAC and UST investments through airdrops.
As it appears, those LUNA2 recipients decided to dump the coin to recover some of their losses, thus reducing its price by 85% less than two weeks after peaking at $12.24.
Investors are also likely to stay away from LUNA2 amid allegations that TfL founder/CEO Do Kwon has lied about having zero LUNAC tokens. Notably, a self-proclaimed Terra insider, who goes by the pseudonym “Fatman”, claims that TfL and Kwon have 42 million Luna worth over $200 million.
Do Kwon has stated several times that TFL has zero new LUNA tokens, making Terra 2 ‘community ownership’. This is an outright lie that no one is talking about. In fact, TFL owns 42M LUNAs, which are worth over $200m, and they are lying through their teeth. (1/6) pic.twitter.com/D1HIWpAWHG
— Fatman (@FatManTerra) 6 June 2022
The user also revealed five “shadow wallets” containing 42.81 million LUNA2 (worth over $110 million at today’s price), noting that they all belong to Kwon.
,[Do Kwon] Used his shadow wallet to approve *his own proposal* through governance manipulation (TfL shouldn’t vote), told everyone it would be a community-owned chain, and then called himself nine. Gave a score of points, “Fatman allegedAdd:
“These are just verified wallets – there are many others.”
TfL, Kwon under investigation
LUNA2 also struggles with increasing scrutiny surrounding TFL, especially after South Korea’s tax regulator already fined $78 million in May.
RELATED: Anchor Dev Claims He Warned Do Kwon Over Unstable 20% Interest Rate
In addition, South Korean prosecutors and police have launched an investigation following allegations that a TfL employee embezzled an undisclosed amount of bitcoin (BTC) for the company.
Additionally, the US Securities and Exchange Commission (SEC) is also investigating whether TfL’s crypto tokens are illegal unregistered securities.
It was sad to see that in spite of the thorn those who were $luna either $UST Most likely they will never get their money back.
Hands down goes to the Biggest Fuck Up of the Year award @stablekwon,
congratulations pic.twitter.com/vop90s292b
— nftedy (@TeddyCleps) 9 June 2022
As a result, LUNA2 price has a high probability of a downside correction for TfL in June with ongoing problems, legal pressures and overall bearish sentiment.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.
