More Than One Million Victims Worldwide Lost Due To Terra-LUNA Scandal

JAKARTA - The destruction of the Terra-LUNA ecosystem in May 2022 caused enormous losses. According to the latest court documents in the United States, the number of victims associated with this case is estimated to reach more than one million people worldwide.

Terra-LUNA's fall not only caused a loss of around 40 billion US Dollars (Rp647 trillion) in a short time, but also sparked a crisis of confidence in the global crypto market. This scandal involved Do Kwon, co-founder of Terraform Labs, who is now facing a series of heavy charges in the United States court.

Based on documents filed by US Attorney Daniel Gitner on January 6, 2025 at the New York Southern District Court, the government is working to inform victims of their rights. Given the huge number of victims, the government plans to launch a special website to provide public updates related to legal proceedings.

Quoted from Coinspeaker, Gitner said, "With transaction properties that are often carried out through crypto wallets or foreign exchanges without clear identity information, it is difficult to determine the exact number of victims." However, estimation shows hundreds of thousands to more than one million individuals and entities affected by the collapse of this ecosystem.

This huge loss highlights the risk of investing in the crypto sector which is often undersupervised. TerraUSD (UST), an algorithmic stablecoin that should retain value equivalent to the US dollar through a symbiotic mechanism with LUNA tokens, became the center of this devastation. When UST lost its dollar parity, the Terra ecosystem entered a death spiral that removed market value in a matter of days.

Do Kwon was arrested in Montenegro in March 2023 while trying to fly to Dubai using a fake passport. After serving four months in prison for document falsification, Kwon was extradited to the United States in December 2024, following a judicial rivalry with South Korea, which also charged him with fraud.

On January 2, 2025, Kwon faced a judge in New York and pleaded not guilty to nine counts of serious fraud linked to Terraform Labs. His extradition process marks the end of a law involving various countries and strengthens international efforts to deal with cross-border crypto crimes.

The pretrial conference scheduled for January 8, 2025 will be an important moment in Do Kwon's legal proceedings. This case is touted as one of the most significant in the history of crypto fraud, with the potential to create precedents in handling digital asset-based financial crimes.