Market rout causes trading to halt in collapsing cryptocurrency networks

After a massive sell-off, Terra’s so-called “stablecoin” Terra’s value plummets

A market rout has shaken confidence and caused the value of one of the largest cryptocurrencies in the world to be almost completely destroyed in just four days

Luna’s price dropped from $60 (£49) per coin on Monday when it was the fourth most popular coin in the world to $0.00003748 Friday morning.

The value of all Lunas in existence has dropped from more than $20bn on Monday (£16.4bn), to $264m.

Luna exists to support the value of Terra, a so-called “stablecoin”, which is tied to the dollar’s price.

Terra owners should theoretically be able to trade their coins for Luna worth one dollar, which would ensure that Terra’s value is stable.

However, a lack of trust in the system keeping the price steady has caused a massive sell-off in Terra. This in turn drove down Luna’s value. Terra fell from $1 to $0.16 Friday morning.

Friday saw the suspension of trading in Terra’s network on which Terra and Luna trade. Operators of the network stated that they are looking to “reconstitute” the network to restore stability.

According to Korean reports, Do Kwan’s wife filed a police report after a stranger knocked on her door seeking her husband.

Investors in the US sued Coinbase, a cryptocurrency exchange, over GYEN, a separate stablecoin.

Coinbase was accused of misleading investors regarding the stability of the token. The lawsuit claims that it was supposed to be tied to the Japanese yen, but it traded hands up to seven times when Coinbase added the token to its exchange last January, leading to massive losses when the token reverted back to its original value.

This week, cryptocurrency markets were rocked by the Terra sell-off. It has been compared to a bank panic. Bitcoin dropped below $27,000 on Thursday, its lowest level since 2020, and well below its November 2021 peak of over $67,000.

Some of them recovered on Friday. Tether, another stablecoin, rose to $30,000, while Bitcoin climbed above $30,000, while Tether, which was also hit by a selloff, traded around the dollar mark.

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