Terra

LUNA2 traders are increasingly short despite 67.5% rally, $4 million liquidated

Downside pressure for Terraform Labs’ LUNA2 mounts amid investigations and rumors from a “Terra insider.”

Terra (LUNA2) reversed a portion of the losses this June 9 as its price per token rose by as much as 67.5% on the day, catching many traders off-guard with their perpetual swap positions.

LUNA2 traders are shorting it

In detail, LUNA2’s price soared from $2 to as high as $3.58. The volatile intraday move coincided with the liquidation of nearly $4 million worth of LUNA2 trades on Binance and Bybit, including $2.46 million worth of short positions, data from Coinglass shows.

Total LUNA2 liquidations. Source: Coinglass.com

Interestingly, LUNA2’s funding rates across Binance and Bybit remained negative, suggesting that traders are still short despite the price bounce. 

LUNA2 funding rates history. Source: Coinglass.com

Shadow wallets FUD

The downside sentiment in the LUNA2 market has strengthened largely because of its underperformance in recent weeks, led by its association with Terra, an algorithmic stablecoin project whose native tokens LUNA Classic (LUNAC; formerly known as LUNA) and TerraUSD (UST) collapsed in May.

Terraform Labs (TFL), the firm behind the Terra blockchain, formed LUNA2 from the ashes of the $40 billion project. It distributed the revamped token among investors who had suffered losses from their LUNC and UST investments via an airdrop.

As it appears, those LUNA2 recipients decided to dump the token to recover some of their losses, thus pushing its price down by 85% less than two weeks after it peaked at $12.24.

LUNA2/USD daily price chart. Source: TradingView

Investors are also likely keeping their distance from LUNA2 amid allegations that Do Kwon, the founder/CEO of TFL, has lied about having zero LUNAC tokens. Notably, a self-proclaimed Terra insider, known by the pseudonym “FatMan,” claims that TFL and Kwon own 42 million LUNA worth over $200 million.

The user also revealed five “shadow wallets” that hold 42.81 million LUNA2 (worth over $110 million at June 9’s price), noting that they all belong to Kwon.

“[Do Kwon] used his shadow wallet to approve *his own proposal* through governance manipulation (TFL is not supposed to vote), told everyone it would be a community-owned chain, and then gave himself a nine-figure score,” Fatman alleged, adding:

“These are just the verified wallets — there are many others.”

TFL, Kwon under investigation

LUNA2 struggles because of the growing scrutiny around TFL, particularly after it was alfined $78 million by South Korea’s tax regulator in May. 

Related: Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate

What’s more, South Korean prosecutors and police have launched an investigation following allegations that a TFL employee embezzled an undisclosed amount of Bitcoin (BTC) fro the company.

Additionally, the U.S. Securities and Exchange Commission (SEC) is also investigating whether TFL’s crypto tokens are illegal unregistered securities.

As a result, LUNA2’s price has a high chance of heading lower in June with the ongoing problems for TFL, legal pressures and overall bearish sentiment. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Legal troubles mount for Terraform Labs as Seoul police investigate

South Korean authorities are currently investigating Terraform Labs and its employees on several charges including tax evasion and market manipulation.

Terraform Labs, the parent company behind the collapsed Terra ecosystem, is currently under multiple investigations from the South Korean authorities.

The latest investigation revolves around the alleged embezzlement of Bitcoin (BTC) from the company’s treasury. According to a report published in a local daily, the Seoul Metropolitan Police Agency received an intelligence tip last month informing them of possible embezzlement of BTC by one of the employees of the firm.

The police stated that the investigation into the alleged embezzlement of BTC from the company’s treasury had no direct connection with tainted co-founder Do Kwon, and they are investigating individual embezzlement charges at this point.

Authorities managed to freeze the stolen funds with the help of a crypto exchange until the investigation is complete. However, the amount of the stolen funds hasn’t been disclosed.

The Luna Foundation Guard (LFG), a fund set up by the company that held over $3 billion in Bitcoin reserves, became the focus of interest in the aftermath of the collapse. The BTC fund was used to help balance the algorithmic stablecoin TerraUSD Classic (USTC). The firm claimed all its BTC reserves were used in a futile attempt to stabilize USTC.

In a recent interview with the Financial Times, Terraform Labs co-founder Daniel Shin denied any allegations of malpractice or fraud. He said:

“There was no intention of deception as we just wanted to innovate the payment settlement system with blockchain technology.”

South Korean authorities have launched a full-scale investigation into the recent collapse of the Terra ecosystem and the role of Terraforms Labs employees and co-founder Do Kwon.

Related: Chinese state media signals tighter crypto regulations in Terra aftermath

The first investigation began in the second week of May after 81 investors collectively filed two complaints against the firm for deceiving investors with a flawed token.

As Cointelegraph reported earlier, South Korea’s feared investigative and prosecutorial team called Grim Reapers of Yeouido was reformed by the new president to look into Terraform Labs. Later, the South Korean Conservative Party requested a parliamentary hearing on the matter.

In the last week of May, Korean authorities subpoenaed all Terraform Labs employees to investigate any internal role in market manipulation. Authorities also requested crypto exchanges to freeze funds associated with the LFG.

The national tax agency of South Korea fined Terraform Labs $78 million on tax evasion charges, which came to light in the aftermath of several investigations into the firm post-collapse.

The collapse of the $40 billion Terra ecosystem didn’t just invite legal troubles for the creators of the project, it has also forced regulators around the globe to rethink their crypto regulatory strategy. Korea formed a new crypto oversight committee, while Japan passed new regulations permitting only trust companies and banks to issue stablecoin.

Anchor dev claims he warned Do Kwon over unsustainable 20% interest rate

Mr. B alleges that the platform was designed only to offer an interest rate of 3.6%, but that changed at the last minute.

Anchor Protocol was originally designed to offer an interest rate of 3.6%, but this was dialed up to 20% just a week before release to attract more investors, a core developer alleged in an interview with Korean media outlet JTBC. 

“I did not know that this would go out with such a high-interest rate. Set to 20% just a week before the release,” said the employee, referred to only as Mr. B in the Korean report:

“I thought it was going to collapse from the beginning (I designed it), but it collapsed 100%.”

Mr. B said that the platform was designed only to offer an interest rate of 3.6%, and this was a key component of keeping the Terra ecosystem stable as it took into account the available funds in Anchor’s war chest.

Mr. B revealed, however, that a week before launch, the developers found out that the plans had been changed, giving investors access to a very high 20% interest for locking up their TerraUSD Classic (USTC) stablecoins in the Anchor Protocol instead.

The JTBC also claimed that it had obtained internal design documents made by Terraform Labs, which wrote about attracting investors with high-interest rates.

The developer said he attempted to take this issue up with Terra Luna founder Kwon Do-Hyung (Do Kwon) just ahead of the launch in April 2019:

“Just before the release, I suggested to CEO Kwon Do-Hyung that the interest rate should be lowered, but it was not accepted.”

The dramatic fall of Luna Classic (LUNC) and the algorithmic stablecoin USTC has led to plans by the South Korean government to launch a new Digital Asset Committee in June to serve as a watchdog over the country’s crypto industry responsible for policy preparation and supervision.

Do Kwon has been summoned to attend a parliamentary hearing on the matter in South Korea in mid-May.

Related: Law Decoded, May 30–June 6: Terra’s aftermath in China, Japan and South Korea

He has also found himself in hot water after court documents revealed he dissolved Terraform Labs Korea just days before the Terra crash.

In May, South Korean authorities also reportedly issued subpoenas to employees of Terraform Labs, looking into whether there was intentional price manipulation and whether the tokens went through proper listing procedures.

Despite this, the Terra co-founder has managed to relaunch the collapsed network on May 28 with a new chain called Terra 2.0, also known as Pheonix-1, aimed at reviving the fallen LUNA.

South Korea ramps up crypto investigations and regulations

South Korea announced Digital Assets Committee, launched an investigation and met with Asia-Pacific financial authorities.

On Friday, South Korea’s Financial Supervisory Service (FSS) began an investigation into payment gateway services that work with digital assets. The FSS is South Korea’s financial regulator that operates under the Financial Services Commission (FSC), both of which are government institutions.

As reported by local news outlet Money Today Co., the FSS had recently demanded reports from 157 payment gateways about any service related to crypto, its plans for the future and disclosure of digital assets. But, an FSS report stated that only six held any digital assets.

Related: How Terra’s collapse will impact future stablecoin regulations

Although the FSS is currently the primary financial regulator, on May 31, 2022, South Korea announced the upcoming launch of the Digital Assets Committee. According to the announcement, this is a temporary solution to bring structure to the virtual asset industry following the Terra crash.

Per the announcement, the guidelines include screening criteria for newly-listed assets, market monitoring, trade monitoring, a level of disclosure, and other investor protections. The five major exchanges in the country appear to agree on the standards and have formed their own committee to help prevent another incident similar to Terra.

Soon after the FSS began its investigation, it announced a remote meeting with other financial supervisory authorities from five countries in the Asia-Pacific region. This event was hosted by the Indonesian Financial Supervisory Service and included Australia, China and Japan, as well.

The meeting covered global market conditions and big tech and crypto. The Korean representative mentioned the need for cryptocurrency regulation, disciplinary action around virtual assets and the expansion of financial regulatory frameworks.

On May 24, 2022, South Korean officials opened an investigation against Do Kwon, the primary figure in the Terra incident. Yoon Chang-Hyeon, the chairman of the People’s Strength Virtual Assets Special Committee, who had met with the top exchanges in response, will lead the Digital Assets Committee mentioned above.

Finance Redefined: Maker founder proposes endgame, Singapore explores DeFi and more

Top DeFi tokens broke out of the month-long bearish pressure to trade in the green and the total value locked in DeFi protocols saw a minor recovery amid continuous price volatility.

The past week in the decentralized finance (DeFi) ecosystem saw many new developments, including the rebirth of the Terra 2.0 blockchain. Meanwhile, Binance’s incubation platform Binance Labs launched a $500 million fund to support and promote Web3 adoption.

Singapore’s central bank partnered with JP Morgan to explore DeFi applications in wholesale funding markets by establishing tokenized bonds. KuCoin launched its very decentralized wallet with DeFi and nonfungible token support.

The top-100 DeFi tokens showed signs of a breakout from a month-long bearish trend, with most of the tokens showing overall gains in the past seven days.

Maker founder proposes MetaDAOs and synthetic ETH in ‘Endgame Plan’

MakerDAO co-founder Rune Christensen has issued a new monumental proposal to push the project into its final form called The Endgame Plan.

Across 3,000 words, including 35 detailed infographics, Christensen explained that the current model of governance at Maker creates a deadlock, making it difficult for the protocol to effectively process “complicated real-world financial deals” and compromising its competitiveness with financial institutions.

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Binance Labs’ $500M fund to catalyze crypto, Web3 and blockchain adoption

Binance Labs, the investment arm of crypto giant Binance, launched a $500 million fund in partnership with global investors including DST Global Partners and Breyer Capital to drive innovation across the crypto, Web3 and blockchain landscape.

Binance Labs plans to allocate the latest $500 million fund to projects across various stages: incubation, early-stage and late-stage growth.

Sharing his take on accelerating the adoption of the crypto ecosystem, Binance CEO Changpeng Zhao noted the importance of a connection between values, people and economies.

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Singapore to explore digital asset tokenization on public chains

The Monetary Authority of Singapore (MAS) has launched Project Guardian, a blockchain-based digital assets trial that will use tokenization. The project will include regulated financial institutions serving as “trust anchors,” with a pilot involving JP Morgan, DBS Bank and Marketnode, the SGX joint venture for bonds.

The Project Guardian initiative, which was announced during the Asia Tech x Singapore Summit on Tuesday, was spearheaded by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat. It will see MAS explore DeFi applications in wholesale funding markets by establishing a liquidity pool of tokenized bonds and deposits to execute borrowing and lending on a public blockchain-based network.

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KuCoin plugs into Web3 with new decentralized wallet

Cryptocurrency trading platform KuCoin has launched a new decentralized wallet platform as interest in Web3 continues to gather steam.

KuCoin Wallet is now live for users, with the browser-based platform paving the way for a mobile application, which is still in development.

The platform plugs into the KuCoin ecosystem and features cross-blockchain integration. Users will be able to buy, sell, trade and send a variety of cryptocurrencies, including Bitcoin (BTC), Ether (ETH) and Tether (USDT), in addition to other tokens.

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DeFi market overview

Analytical data reveals that DeFi’s total value locked saw a trend reversal, with the value reaching above $80 billion again. Data from Cointelegraph Markets Pro and TradingView reveals that DeFi’s top 100 tokens by market capitalization registered a week filled with volatile price action but broke out of the bearish trend over the past couple of days.

The majority of the DeFi tokens in the top-100 ranking by market cap traded in the green, Aave (AAVE) was the biggest gainer with a 10.42% surge, followed by CurveDAO (CRV) with 10%. Theta Network (THETA) registered an 8% price rise, while Chainlink (LINK) grew 7%.

The relaunched Terra 2.0 network, which was listed by major exchanges following its revival on May 28, has seen a volatile price action since then. The Terra (LUNA) price fell by 70% on the first day of its trading and currently trading at one-third of its listing price.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us again next Friday for more stories, insights and education in this dynamically advancing space.

Japan passes bill to limit stablecoin issuance to banks and trust companies

The Japanese government is rushing to enforce new stablecoin laws in the aftermath of the Terra collapse.

Japan is moving forward with legislation regarding the issuance of stablecoins, i.e., digital assets with their value pegged to fiat currencies or stabilized by an algorithm. 

On Friday, Japan’s parliament passed a bill to ban stablecoin issuance by non-banking institutions, local news agency Nikkei reported. 

The bill reportedly stipulates that the issuance of stablecoins is limited to licensed banks, registered money transfer agents and trust companies in Japan.

The new legislation also introduces a registration system for financial institutions to issue such digital assets and provides measures against money laundering.

According to the report, the bill aims to protect investors and the financial system from risks associated with the rapid adoption of stablecoins, which saw its market surging up to 20 trillion yen, or more than $150 billion.

The new legal framework will reportedly take effect in 2023, with Japan’s Financial Services Agency planning to introduce regulations for stablecoin issuers in the coming months.

Related: ​​UK government proposes additional safeguards against stablecoin failure risks

Japan’s stablecoin bill comes in the aftermath of a massive decline on cryptocurrency markets fueled by the Terra tokens collapse, with the algorithmic stablecoin Terra USD (UST) losing its 1:1 value to the U.S. dollar in early May.

The stablecoin market turmoil has not been exclusive to the Terra blockchain as other algorithmic stablecoins like DEI also subsequently lost its dollar peg, plummeting to as low as $0.4 in late May. 

3 reasons why Ethereum price is pinned below $2,000

ETH price is meeting strong resistance at the $2,000 level and these trading metrics explain why.

Ether’s (ETH) market structure continues to be bearish despite the failed attempt to break the descending channel resistance at $2,000 on May 31. This three-week-long price formation could mean that an eventual retest of the $1,700 support is underway.

Ether/USD 4-hour price at Bitstamp. Source: TradingView

On the non-crypto side, a number of equities-related factors are translating to negative sentiment in the crypto market. This week Microsoft (MSFT) lowered its profit and revenue outlook, citing challenging macroeconomic conditions. The U.S. Federal Reserve signalled in its periodic “Beige Book” that economic activity may have cooled in some parts of the country and the Fed is about to reduce its $9 trillion asset portfolio to combat persistent inflation.

On the bright side, an institutional investor survey published by The Economist magazine showed that 85% of the respondents agreed that open-source cryptocurrencies like Bitcoin (BTC) or Ether (ETH) are useful as diversifiers in portfolio or treasury accounts.

From the macroeconomic perspective, investors are still risk-averse, which could translate to a reduced appetite for cryptocurrencies.

Ethereum still has a mountain to climb

The Ethereum network’s total value locked (TVL), the total amount of assets deposited to the network, has dropped by 5.5% since Ether began its downtrend three weeks ago.

Ethereum network total value locked, ETH. Source: Defi Llama

The network’s TVL peaked at 28.7 billion Ether on May 10 and currently stands at 27.1 million. Decentralized finance (DeFi) deposits were deeply impacted by the USD Terra (UST) — now known as TerraUSD Classic (USTC) — stablecoin collapse on May 10. All things considered, the indicator shows a moderate decrease, which is somewhat expected after such an unprecedented event.

To understand how professional traders are positioned, let’s look at Ether’s futures market data. Quarterly futures are whales and arbitrage desks’ preferred instruments due to their lack of a fluctuating funding rate.

These fixed-month contracts usually trade at a 5% to 12% premium to spot markets, indicating that sellers request more money to withhold settlement longer. This situation is also common in traditional assets such as stocks and commodities.

Ether futures 3-month annualized premium. Source: Laevitas

Over the past month, Ether’s futures contracts premium has remained near 3%, which is below the 5% neutral-market threshold. The lack of leverage demand from buyers is evident as the current 2.5% basis indicator remains depressed despite Ether’s 24% negative performance in three weeks.

Fear a global downturn continues to impact crypto prices

Ether’s crash to $1,700 on May 27 drained any leftover bullish sentiment and, more importantly, caused $235 million in leverage long futures contract liquidations. Even though Ether price tested the $2,000 resistance on May 31, there is no evidence of strength from derivatives or DeFi deposits, according to the TVL metric.

As investors’ focus remains on traditional markets and the impacts of global macroeconomic worsening conditions, there is little hope for a sustainable Ether price decoupling to the upside.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

These are the least ‘stable’ stablecoins not named TerraUSD

Some stablecoins have failed to deliver the dollar’s stability to crypto traders long before TerraUSD’s collapse.

The recent collapse of the once third-largest stablecoin, TerraUSD (UST), has raised questions about other fiat-pegged tokens and their ability to maintain their pegs.

Stablecoins’ stability in question

Stablecoin firms claim that each of their issued tokens is backed by real-world and/or crypto assets, so they behave as a vital component in the crypto market, providing traders with an alternative in which to park their cash between placing bets on volatile coins.

They include stablecoins that are supposedly 100% backed by cash or cash equivalents (bank deposits, Treasury bills, commercial paper, etc.), such as Tether (USDT) and Circle USD (USDC).

At the other end of the spectrum are algorithmic stablecoins. They are not necessarily backed by real assets but depend on financial engineering to maintain their peg with fiat money, usually the dollar.

UST/USD daily price chart. Source: TradingView

However, following the collapse of UST—an algorithmic stablecoin, that stability is now in doubt. 

The distrust has led to massive outflows from both asset-backed and algorithmic stablecoin projects. For instance, the market capitalization of USDT has fallen from $83.22 billion on May 9—the day on which UST started losing its U.S. dollar peg—to $72.49 billion on June 2.

USDT drifted from its one-to-one dollar parity while suffering outflows, albeit briefly. Unfortunately, that is not the case with algorithmic stablecoins; some are still trading below their intended fiat pegs, as discussed below.

USDX

USDX, the Kava Network’s native “decentralized” stablecoin, was notorious for mostly trading $0.02–$0.04 cents below the dollar. But, it moved further away from its near-perfect peg with the greenback amid the TerraUSD debacle.

In detail, USDX dropped to its lowest level on record—at $0.66—on May 12. The USDX/USD pair has been attempting to reclaim its dollar peg ever since and was changing hands for around $0.89 on June 2, as shown below.

USDX price chart year-to-date. Source: CoinMarketCap

Simultaneously, USDX has witnessed outflows worth $60 million since May 9, illustrating that traders are redeeming their tokens.

Kava Labs, the development team behind Kava Network, noted that USDX lost its dollar peg due to its exposure to UST as one of its collaterals. Meanwhile, a decline across USDX’s other reserve assets, including KAVA, Cosmos (ATOM), and Wrapped Bitcoin (WBTC), also shook its stability.

In May, Scott Stuart, the co-founder and CEO of Kava Labs, asserted that USDX would retain its dollar peg after they flush UST out of their ecosystem.

VAI

Vai (VAI) is another victim of the ongoing stablecoin market rout.

The algorithmic stablecoin, built on the Binance Smart Chain-based Venus Protocol — a lending platform, traded for $0.95 this June 2. However, like USDX, the token is notorious for trading below its intended dollar peg since launch.

Related: DeFi protocols launch stablecoins to lure new users and liquidity, but does it work?

For instance, in September 2021—long before the TerraUSD’s collapse, VAI had dropped as low as $0.74. In addition, the depeg scenario occurred after Venus Protocol suffered a $77 million loss on bad debts in May 2021 due to large liquidations in its lending platform.

VAI price chart to date. Source: CoinMarketCap

The market cap of VAI was $272.84 million in May 2021. But after the Venus debt fiasco, coupled with TerraUSD’s collapse, VAI’s net valuation dropped to almost $85 million, suggesting a substantial plunge in its demand.

Some stable exceptions

Dai (DAI), an algorithmic stablecoin native to Maker—a peer-to-contract lending platform, performed exceptionally well versus its rivals, never fluctuating too far from its promised dollar peg even though witnessing a 20% decline in its market capitalization since May 9.

DAI market cap year-to-date. Source: CoinMarketCap

FRAX and MAI, other algorithmic stablecoin projects, also maintained their dollar peg during TerraUSD’s crash. 

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Binance’s CZ says he is ‘skeptical’ about the Terra relaunch

Binance CEO CZ voices skepticism around the relaunch of the Terra blockchain and its new LUNA token following the latest fiasco.

Binance CEO Changpeng Zhao, also known as CZ, expressed skepticism around the revival plan for the Terra ecosystem and the launch of the new LUNA token.

“I try not to predict what the community will do. […] Many are skeptical. I’m one of those guys,” said CZ in an exclusive interview with Cointelegraph.

Following the collapse of TerraUSD (USD), the Terra ecosystem’s stablecoin, CZ criticized its team for not handling the crisis properly and pointed at the project’s flaws that led to the crash. Still, Binance is now actively participating in Terra’s revival plan by hosting the airdrop of its new LUNA token.

As CZ pointed out, despite the widespread skepticism around the Terra relaunch, Binance has a responsibility to help users affected by the crash of LUNA.

“We still need to ensure continuity of people’s access to liquidity. […] We have to support the revival plan hoping that it may work,” he explained. 

According to CZ, the Terra fiasco should serve as a warning to projects that rely on unsustainable business models based on “aggressive incentives.”

As he pointed out, crypto projects such as Terra offer high yields to attract people in the hopes that once there are enough users, they will become profitable.

“We should really look at them in a fundamental way to measure that more revenue, more income is generated than just an incentive payout,” CZ pointed out. 

Check out the full interview on Cointelegraph’s YouTube channel, and don’t forget to subscribe!

Kraken CEO defends listing LUNA 2.0: ‘Bitcoin traders don’t pay the bills’

Kraken’s Jesse Powell came under fire for listing the second-generation LUNA; separately, he railed against TradeFi’s crypto exchange claims.

The crypto winter has emotions running high. Kraken CEO Jesse Powell came under fire for his defense of listing the new LUNA, also known as LUNA 2.0, which seeks to bring the original LUNA — now known as Luna Classic (LUNC) — and TerraUSD — now known as TerraUSD Classic (USTC) — back from the dead.

Respected names in the crypto industry such as Nic Carter of Castle Ventures spoke out against the decision, while in a separate tweet thread, Powell lashed out at short-seller Jim Chanos, who had built a large short against Coinbase, Kraken’s biggest competitor.

Carter simply tweeted “why” to the official Kraken Twitter account that announced the listing of the new LUNA.

The world’s fourth-largest crypto exchange, Kraken lists over 160 cryptocurrencies. The list grows every month, from Bitcoin (BTC) to Filecoin (FIL) to the second iteration of LUNA, which currently sits 164th on its price index.

The first Terra collapse wiped out circa $50 billion, causing suicide hotlines to be pinned to the Terra subreddit, while legal documents reveal Terraform Labs founder Do Kwon liquidated two branches and an entire company days before the crash.

Related: Exchanges back ‘Terra 2.0 revival plan’ via airdrops, listing, buyback and burning

The project was then hard-forked and relaunched with little to no recompense for impoverished investors. An airdrop, for example, did not go how the developers intended, as tokens were unevenly distributed. The new LUNA has since slid from highs of almost $20 to less than $8, despite a 90% spike in price driven by a Binance airdrop.

Price chart for LUNA showing the Binance pump on May 30. Source: CoinMarketCap

Powell cites that “client demand” motivated the listing of LUNA. Rohan Grey, an assistant professor of law at Willamette University, called Powell out on the move, arguing that eBay does not allow fraudsters to remain on the e-commerce platform, so why should crypto exchanges allow Terra a seat at the table? The comment was a quip to Powell’s claim about Kraken:

“We’re a marketplace, like eBay. BTCBTC traders don’t pay the bills.”

Powell has previously shown a decisive side to his operations, recently closing Kraken’s global headquarters because “San Francisco is not safe.” However, when it comes to money and Kraken, “We try to be as asset-agnostic as possible,” he tweeted.

“Fiat and most stocks are garbage but where’s the outrage? Revenue from these other coins pays for all the security, pro-BTC lobbying and marketing.”

In a separate Twitter thread, Kraken defended the future of crypto exchanges. In a Crypto Critics Corner podcast, Chanos — an American investment manager — detailed the short he had built up against Coinbase, America’s largest crypto exchange. For Powell, there will be a “paradigm shift over the next 10 years,” and crypto exchanges will come out as winners. 

Infighting and Twitter spats aside, for those seeking signal among the war of words, Powell shared his investment preferences for picking Bitcoin, investing in exchanges, or both:

Kraken did not immediately respond to Cointelegraph’s request for comment.