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Terraform Legal Team Quits – Is It Over for LUNA?

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After a supposed change in job status for several employees of Terraform Labs’ legal team, the ongoing saga with Terraform Labs, the blockchain developer behind Terra (LUNA), took a turn.

Terraform Labs’ internal legal staff resigned shortly after Terra’s algorithmic stablecoin imploded, causing a massive blow to the broader crypto markets.

Terraform Lab’s general lawyer Marc Goldich, chief litigation, and regulatory counsel Noah Axler, and chief corporate counsel Lawrence Florio all left the blockchain business in May 2022, according to their LinkedIn profiles. Axler and Florio joined Terraform Labs in January 2022, while Goldich started in August 2021.

A major hit for Terraform and the entire ecosystem

“Terraform Labs has had a challenging week, and a small number of staff members have resigned recently,” a company spokesperson said.

“The vast majority of team members are still dedicated to fulfilling the project’s objectives. Terra is more than UST, with a strong community and a well-defined rebuilding strategy. The Terra spokesman stated, “Our current focus is on implementing our plan to restore the Terra ecosystem.”

Do Kwon, a prominent co-founder of Terra has made various proposals for Terra’s future in the days following the collapse of UST and LUNA.

The most recent plan, known as “Terra Ecosystem Revival Plan 2,” advocates for the permanent destruction of UST and the forking (splitting) of LUNA to LUNA Classic (LUNC) and the new coin to be called LUNA.

Previous UST and LUNA investors who lost a significant investment in the coin, as well as current LUNA holders, would be airdropped 1 billion new LUNA tokens as part of the plan.

Many crypto users, possibly experiencing big losses, advocated for legal action against Kwon even before some of Terraform Labs’ lawyers reportedly terminated connections with the firm. Others claimed that Goldich, Axler, and Florio’s possible resignation was due to a moral issue while defending Terraform Labs or concerns about where their next salary would come from.

The legal staff would not be the first in the crypto world to flee a sinking ship if their departure was related to concerns about the LUNA and UST crashes. SushiSwap’s chief technology officer, Joseph Delong, resigned in December 2021, claiming “chaos” in the decentralized exchange’s operations.

Luna Foundation Is Battling as UST Crashes Again

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The Luna Foundation Guard (LFG) has been fighting to save its embattled UST stablecoin, which has yet again fallen out of favor with the dollar.

If the enormous crypto market crash wasn’t horrible enough, the collapse of the world’s third-largest stablecoin ecosystem has just added to the flames.

The Luna Foundation Guard, a Singapore-based non-profit that maintains the Terra network, has been reaching out to investors in the hopes of obtaining funding to save the beleaguered stablecoin.

According to The Block, which claims “those acquainted with the subject,” the LFG is aiming to raise more than $1 billion to collateralize the UST stablecoin.

The development is unsurprising given that the stablecoin has decoupled from the US dollar, falling below $0.70 twice this week.

Luna suffers as UST crashes for the second time

Kwon Do, the founder and CEO of Terraform Labs has remained silent about the debacle, and the financing has yet to be confirmed. To say the least, his most recent Twitter message at the time of writing was cryptic:

This comes after a tweet from a few hours ago that stated, “Close to unveiling a $UST recovery plan.” “Hold on tight.”

On May 10, the Luna team issued some explanations in response to the flood of misinformation that has swept the mainstream media. There will be no “death spiral” if the UST market capitalization exceeds that of LUNA, the token that serves as collateral.

It also noted that user on-chain activities and Terra economy demand, such as network economic activity and accompanying cash flow, support UST. “Peg recovering takes time due to the restrictions,” it said, “but it bounces back.”

According to a Google analytics dashboard, the stablecoin was backed up with virtually all of the USD reserve value. It has dropped from about $4 billion to roughly $146 million where it is now.

On May 10, the stablecoin returned to moreover 90% of a dollar, but on May 11, it took another downward dip. According to CoinGecko, UST just plummeted for the second time, hitting $0.4436.