The recent collapse of the Terra ecosystem could well be described as one of the biggest failures in the crypto world. As victims come to terms with what happened, the important question remains: Was the crash of the UST and LUNA tokens premeditated?
According to new court documents, Terraform Labs Korea and two other offices in South Korea were successfully liquidated just days before the Terra ecosystem fell apart.
Did Do Kwon Know The Crash Was Coming?
Information pulled from the South Korea Supreme Court Registry Office shows that Do Kwon initiated the dissolution of a whole company along with two subsidiaries, local publication Digital Today reported. Shareholders agreed to liquidate the Busan headquarters and Seoul branch after their April 30 meeting, with their fate being sealed on May 4 and 5 respectively. Do Kwon was named as the liquidator.
While correlation does not imply causation, the timing is somewhat suspicious given the dramatic collapse of the TerraUSD (UST) and its companion token LUNA days later on May 10. Some observers claim the decision to dissolve companies in the days preceding the crash indicates the plan to evade the responsibility for the aftermath. In other words, the Terraform Labs CEO seems to have been aware something was set to happen.
After the crash, Kwon was silent for a few days before giving a statement on how he planned to resolve his currencies’ sudden fall from grace. He recently proposed forking Terra without UST, dubbing the current chain “Terra Classic”.
The majority of Terra community members prefer a burn mechanism instead of a hard fork. Binance CEO Changpeng Zhao, who is an early Terra investor, is also against forking LUNA’s blockchain. He doesn’t believe a fork will save the beleaguered Terra ecosystem. Nonetheless, if Kwon’s proposal is passed, the new network will go live on May 27.
Meanwhile, there’s a wave of civil and criminal proceedings initiated against Kwon as some investors who were financially harmed by the spiral collapse of UST and LUNA seek justice.