Amid news of Do Kwon’s international arrest warrant, his Terra Classic (LUNC) has tanked once again. In weeks prior to now, LUNC was rallying in triple digits. Many attribute the previous rally to the burn tax for on-chain activities that were proposed by the Terra Classic community. Nonetheless, Terra Classic would not pull through very long. After news of a South Korean arrest warrant with Kwon’s name surfaced, investors and users lost whatever confidence they had in the project.
Terra was at the heart of the crash earlier this year. Many firms that had exposure to LUNC (then known as LUNA), likewise went underwater. The project is currently the most unprofitable crypto in the top 100. At press time the project had fallen by 19.4% in the last 24 hours. The project has also fallen by 53.6% in the last two weeks.
Is Do Kwon’s arrest warrant the only reason for Terra Classic’s fall?
Although Kwon’s warrant is undoubtedly a major contributor, there are other factors that may be responsible as well. LUNC is almost independent of LUNA, albeit the project still uses some old resources from the Terra project. But that aside, LUNC is completely its own thing. Hence any news pertaining to Terra executives should not ideally affect LUNC.
For one, it could be possible that Binance’s rules for burning LUNC had an effect on investor sentiment. The world’s largest exchange started a subscription model for users to burn LUNC. Binance chief CZ said that a complete solution can only be expected if 50% of LUNC trading volumes are on board with the subscription.
Binance is also the exchange where the project has the most liquidity. There are 6.9 trillion Terra Classic tokens in circulation, yet only 800 million LUNC were burned on Binance on the day the update went into effect.
At press time, LUNC was trading at $0.00019283, down by 2.2% in the last hour.