Luna Classic price bleeds, Do Kwon hit with new $56.9 million lawsuit

Terraform Labs CEO and co-founder Do Kwon has been issued with a class-action lawsuit for $56.9 million in damages, on behalf of 30 disgruntled international investors. Meanwhile, Terra’s resurrected token LUNC witnessed substantial declines on the back of current crypto market volatility, and analysts say it has lower to go.  

Also read: FTT collapse: How $1,000,000 invested in FTT was slashed to $180,000 overnight

Luna Classic price nosedives as Do Kwon is hit with a class action lawsuit

Luna Classic, formerly LUNA now LUNC, witnessed a nearly 25% decline in its price overnight. Do Kwon, CEO of Terraform Labs has faced legal troubles since the $41 billion implosion of LUNA-UST. The algorithmic stablecoin UST suffered a depeg and wiped out billions of dollars from the crypto market cap in less than a week. 

A group of 30 international investors have teamed up to file a class action lawsuit against Kwon in Singapore. Wall Street Journal reported that the plaintiffs claim to have lost $57 million to the Terra-LUNA collapse. 

The UST stablecoin being pegged 1:1 to the US Dollar was expected to act as a store of value. However, instead of protecting investor funds from crypto market volatility, UST collapsed, wiping out thousands of traders in the process. 

The lawsuit alleges that Kwon was aware of the “structural weakness” of UST but continued making “fraudulent misrepresentations.” Kwon allowed investors to keep purchasing UST despite his knowledge of the underlying issues. 

Julian Monero Beltran, a Spanish citizen who lost $1.1 million worth of UST is leading the lawsuit. Douglas Gan Yi Dong, a Singapore native joined Beltran in his legal battle against Kwon. 

In addition to Kwon, the following have been listed as defendants:

• Singapore-incorporated Terraform Labs PTE Ltd
• Nicholas Platias, Terraform Lab's former head of research
• Luna Foundation Guard (LFG), a fund established to support the growth of the Terra ecosystem 

Analysts are bearish on LUNC price 

Tony Montperious, technical analyst at FXStreet argues that LUNC is at risk of further decline despite the Relative Strength Index being at extremely oversold territory. A Fibonacci projection tool shows the current decline is a 200% projection of the last LUNC dip. 

LUNCUSDT price chart

The expert believes there is still further to go, marking the 261.8% Fib level as a high probability target zone. This suggests a 35% decline from the current level is likely for Luna Classic price. A move above $0.0022073 could invalidate the bearish thesis.