Rebranded Terra returns with huge price fall

Seen above is a chart of the new Terra's price after Terraform Labs opened the Terra 2.0 ecosystem on Saturday. Screenshot of CoinMarketCap

By Lee Min-hyung

The much-hyped revival of the Terra ecosystem is still sparking concerns over its credibility, with the price of Terra Luna 2.0 falling by around 70 percent Sunday in less than a day after its launch.

According to data from CoinMarketCap, the price of the new Luna coin plunged to $5.49 as of 2:20 p.m. (KST), down by 69.15 percent from $17.80 on 6 p.m. Saturday.

The rebirth of the Terra-Luna dual coin system came about two weeks after original Luna's price tumbled to near zero in mid-May after Terra started falling below its intended $1 peg.

The abrupt collapse of the two once-promising cryptocurrencies led to losses of trillions won for investors around the globe.

Despite the escalating controversy, Terraform Labs co-founder Do Kwon and company officials have not made any public appearances and only shared their plans to revive the platform by launching Terra 2.0.

Some overseas crypto exchanges are moving to list the new coins, but their Korean counterparts remained firm in their determination to stop trading of the original Luna as well as the revived cryptocurrencies.

The decision came amid escalating political pressure on exchanges here. Early last week, the National Assembly and financial authorities held an emergency meeting with leaders of major exchange operators, shifting part of the responsibility over the latest Luna fiasco onto the exchanges.

“Authorities remain extra vigilant on every single move that exchanges make in the wake of the Luna collapse,” an official from the industry said. “It will be realistically impossible for any Korean exchanges to support trading of Luna at a time when investigative and financial authorities launch probes into Terraform Labs and the scandal-tainted cryptocurrencies.”

Any exchanges and crypto players will have to keep a low profile at least in the Korean market for the time being, according to the official.

With watchdogs hinting at introducing a series of regulatory restrictions on exchanges, Korea's top five exchanges of Upbit, Bithumb, Coinone, Korbit and Gopax are moving to set up a special committee to jointly take measures in the event of any other problems similar to the recent Luna debacle.

It remains to be seen whether the Terra 2.0 ecosystem will be able to regain its glory, but the likelihood appears slim, as investors remain skeptical over the credibility of Terra and Luna.

The unexpected demise of the old Terra ecosystem has triggered fears over the high volatility of cryptocurrencies, resulting in overall price falls of even major cryptocurrencies such as Bitcoin and Ethereum.

According to the coin market tracker, the price of Bitcoin has fallen by around 30 percent since May 5. Bitcoin is traded at around $28,900, while Ethereum prices have been experiencing a bigger loss of around 40 percent during the same period.