"From 10.5 Million Won to 50,000 Won"... Growing Calls for Legislation Amid 'Luna 99% Crash'

Binance Followed by Upbit, Bithumb, and Gopax... 'Luna' Delisting Decision
Kwon Do-hyung Says "My Invention Caused Pain to Everyone, I Am Heartbroken" Amid Luna and Terra Crash

Photo by Asia Economy DB.

[Asia Economy Reporter Heo Midam] The prices of Luna and Terra, virtual assets created by Koreans, have plummeted by more than 99% in the past week, causing investors to suffer massive losses. As the damage snowballed, major domestic and international exchanges have successively delisted these assets. Some argue that the government should directly intervene to regulate the virtual asset market. Due to the crash of virtual assets, investors who lost all their assets overnight are suffering extreme stress, even contemplating drastic measures, prompting calls for the government to establish direct investor protection measures.

On the 17th, numerous posts appeared on online communities lamenting heavy losses from the Luna and Terra crash. On that day, one netizen posted on a virtual asset-related community, "I lost 3 million won investing in Luna," saying, "Who would have known it would turn out like this? It might not be much money to others, but it was money I diligently saved while raising my child alone, and I lost it all in this incident." Another netizen shared a screenshot of Luna transaction details, stating, "It eventually hit -99.5%. In one day, 10.5 million won became 50,000 won."

Not only in Korea but also on overseas online communities, posts complaining about damages caused by the Luna incident continue. One overseas netizen wrote on Reddit’s Luna board, "The $450,000 (about 578 million won) I saved my whole life disappeared overnight," adding, "I have no money to pay the bank. I will lose my home and become homeless."

Luna and Terra are virtual assets issued by the blockchain company Terraform Labs, founded by CEO Kwon Do-hyung, a former Apple engineer. Terra was designed so that each coin’s value would be pegged to 1 dollar. However, as Terra’s price recently fell below 1 dollar, the value of its sister coin Luna also plummeted. This led to a vicious cycle with Terra falling further, resulting in a massive crash.

Major virtual asset exchanges at home and abroad have already begun delisting Luna and Terra. Starting with Binance, the world’s largest virtual asset exchange, on the 13th, domestic exchanges such as Upbit, Bithumb, and Gopax also decided to delist them.

Recently, posts verifying losses by Luna investors have been steadily appearing on online communities. Photo by DC Inside screen capture.

Some argue that legislation is needed to protect investors in the digital asset market. Currently, virtual asset trading is left to private autonomy, so the government has no grounds to intervene. As a result, financial authorities do not have the authority to inspect or supervise Terraform Labs, the issuer of Luna and Terra, and are limited to monitoring the situation.

However, as this incident shook the virtual asset market and the need to protect investors grew, financial authorities have expressed their intention to accelerate the enactment of the Digital Asset Basic Act. This law was a campaign pledge made by President Yoon Seok-yeol during his candidacy and was set as a national agenda after his election.

During his candidacy in January, President Yoon held a press conference to announce the 'Safe Investment for Retail Virtual Asset Investors' policy pledge, stating, "The global virtual asset market size exceeds 2,000 trillion won, and about 7.7 million people in Korea invest in virtual assets," adding, "Especially, our youth are adapting to the new technology and value of digital assets faster than any other country in the world, investing actively. We will actively create an environment where youth and investors can invest with peace of mind."

Meanwhile, CEO Kwon apologized on Twitter on the 13th (local time) regarding the Luna and Terra crash. He said, "I have been on calls with Terra community members, employees, friends, and family who were deeply shocked by the UST (Terra) depegging (falling below 1 dollar) over the past few days," adding, "I am heartbroken that my invention (Luna and Terra) has caused pain to all of you."

He continued, "Neither I nor any affiliated institutions have profited from this incident," emphasizing, "I did not sell Luna or UST during the (crash) crisis."