Every time you think you've seen the end of the Luna slump, something else happens that pushes the project into more despair. The project that was subject to what seemed like a coordinated exploit on their over-leveraged position is in even deeper waters as law enforcement and the government now gets involved.
Word on the news is that Do Kwon has a senate summons waiting on his desk. This event will most likely be televised and the general public might get some insight into the events that transpired.
At the time of writing, Luna trades at $0.0001379 and to put that into perspective, if you invested $1million when Luna was $1, today that amount will be worth $137.9. Something just ain't right and something has to give because quite a lot of lives have been damaged by the event.
As you probably know, Terra was a project that rose from obscurity and thrust into the limelight. A lot of venture capitalists and leverage were behind this rise, and immediately cracks began to emanate in the feeble architecture, the structure came crashing down to where we are today.
There's a school of thought that claims that the current bear market we're experiencing right now is connected to the Luna incident. According to this theory, investor confidence is at an all-time low these days.
Fortunately for the rest of us, the market will always recover. If you've been around for the past three or four years, you'll know that bear markets always have a triggering event and the same goes for the Bull market, which often coincides with Bitcoin halving that's scheduled for sometime in 2024.
Sweating up a storm
Luna's problems are exasperated by further inquiries by the financial watchdog in South Korea. According to Cointelegraph and numerous other sources, Terra labs has been slapped with a fine related to tax evasion.
According to the publication that was initially covered by Navar news, Terra labs was hit with a $78 million, or 100 billion won fine for charges related to tax evasion. The charges filed against Terra were a result of operations that were being carried out in South Korea.
Meanwhile, on the other side of the fence, it was documented that Do Kwon wasn't satisfied with the tax policy in South Korea and attempted to liquidate Terra operations that were affiliated with South Korea. Unfortunately for Terra, they didn't do proper due diligence and are now facing even further sanctions.
Terra was registered outside South Korea but management decisions were being carried out from South Korea. So the tax fine might actually stick.
Funny thing is that this isn't the first time terra is being slapped with a tax evasion fine.
Earlier in October, Virgin Islands subsidiaries of Terra were fined $3.6 million, or 4.66 billion won, in income tax and $34.7 million, or 44.7 billion won, in corporate tax. source
There's going to be a price to pay after the crash of Luna and after answering to South Korean law enforcement, there might be further sanctions in other countries. What we know for sure is that this saga is far from over
Point of no return
Luna's frailties were exposed in a disastrous way and this is a lesson for the entire crypto industry. One of the many lessons to learn from this event is that you should not believe your own hype.
Terra was flying high up in territories that they never should have been at in the first place. Now the once soaring eagle has crashed back down to the ground and is digging agonizingly close to the grave.
Conversations about a remedy, whether it is forking or using the Terra foundation's reserve asset will fall on deaf ears. The UST peg keeps crumbling further and even the blockchain operation was ground to a halt.
I want to give an optimistic spin but I honestly can't see a way back from here. Luna is going to fade into oblivion like Bitconnect and many other defunct crypto projects that were built on a weak foundation.
The problem is not the market price, the problem is that Terra lab's system is broken and can't be fixed because the developers are at their wits' end. This is a hopeless situation that is destined to end very badly for everyone involved in the project.