- LBank C-level executive Xiang Zhang claims that the crypto winter was caused by the Luna collapse.
- Zhang thinks that Terraform Labs closed its services to avoid taxation.
- Zhang clarifies that all these are yet to be confirmed and just hearsay at this point.
Xiang Zhang, one of the LBank’s C-level executives, claims that the extreme crypto market conditions currently happening were caused by the collapse of Terraform Labs’ Terra (LUNA) and TerraUSD (UST).
In sharing what he thought about the present crypto winter, Zhang blamed it on the Terraform Labs and its notorious algorithmic stablecoin and crypto.
— xiangzhang@LBank.info (@xiangzhang87) June 16, 2022
Notably, the then TerraUSD, or UST, collapsed when investors fled the stablecoin after prices of most digital currencies plummeted in May. In its downfall, UST brought its sister token Luna down with it.
Following the implosion of LUNC and USTC, all kinds of panic in digital assets surrounded the space. Some crypto analysts believe that the incident dragged down an already bearish market, which today can still be felt.
According to pieces of information fed to CQ, Zhang echoed this sentiment that Luna caused a lot of investors to lose money, initiating the crypto winter.
Zhang also thinks that Terraform Labs closed its services to avoid taxation. Interestingly, multiple reports have also claimed that Do Kwon’s Singapore-based company shut down its South Korean branch last year to allegedly evade paying taxes.
While the real reasons behind Terraform’s close down have not surfaced yet, South Korea’s national tax agency handed the company a hefty $78 million penalty for tax evasion charges.
Lastly, the LBank executive speculates Terraform is to blame for the current bearish market because Do Kwon’s company deliberately dumped the price of Luna since they are aware that the liquidity was huge and it was easy to short Luna.
However, Zhang clarifies that all these are yet to be confirmed and just hearsay at this point.
The Terra blockchain has since officially halted, and UST remained de-pegged from the US dollar. Meanwhile, the original Luna has been rebranded to Terra Classic, which is almost down by 90% from its all-time high of $18.87.
Despite the crash of LUNA, several exchanges showed their support for LUNA 2.0. LBank was one of the major crypto exchanges that welcomed the launch of Terra Classic (LUNC). On May 26, Do Kwon himself acknowledged the LBank support of the launch of Terra 2.0 and its subsequent token airdrop.