Vietnam’s Luna investors face turbulence

Hoang Anh, a marketer in Hanoi, said he owns both the new and old versions of Terra’s cryptocurrency, Luna and Lunc, or Luna Classic.

He had viewed Lunc, whose market cap has fallen to less than a billion dollars from US$40 billion a couple months ago, as a gamble, but was hopeful about the new version.

Like many other amateur investors, he too bought Luna in early June at $8 a token after it had doubled to over $11 on May 31.

But it has since plummeted to $2-3 despite a rebound in most large-cap cryptocurrencies.

Prices of Luna and Luna Classic (Lunc) has been falling despite a rebound in most large-cap cryptocurrencies. Photo by VnExpress/Luu Quy

Anh said he had to sell to cut a portion losses, but kept the rest in the hope the price would recover following measures by the development team.

Another Hanoian investor, Duc Duyet, bought $1,000 worth of Luna on May 31 as a long-term investment and also bought some Lunc to try bottom-fishing.

But Luna has lost over 70 percent of its value since, while Lunc has fallen close to his cost price after making some gains.

“Perhaps I should delete the trading app so that I don’t have to worry about it any more.”

The Luna investor community in Vietnam is in pain. Some bought not only Luna and Lunc but also some other Terra-related cryptocurrencies like ANC and USTC. Overall, their values have fallen by at least 20 percent.

“Are we being scammed for a second time, everyone?” Ngoc Bach, an investor, posted in a cryptocurrency group.

Luna’s all-time price chart. Photo courtesy of CoinMarketCap

In those groups, members are divided into two camps: some still have faith in the development team and are holding on to the tokens, waiting for prices to surge, but others have thrown in the towel and sold out.

Nguyen Tien Bac, an administrator of a group, said many Vietnamese investors are still looking to profit from Luna and Lunc.

They believe Lunc, once among the top 10 cryptocurrency by market cap, is “too big to fail” while the new Luna reached the billion-dollar mark immediately after listing.

But Bac warned that prices are unlikely to climb any since supply of tokens in the trillions now.

“Gains, if any, will possibly be because of manipulation.”

A recent expose and the development team’s silence have dragged Luna’s price down, according to the blockchain-focused website CryptoSlate.

On June 6, a Twitter-based Terra community whistleblower known as “FatMan” revealed that Terraform Labs, developer of Luna, and its founder Do Kwon had other secret and shadow wallets holding at least 42 million LUNA tokens, worth over $200 million.

This went against their claim of only issuing to the community and not holding any Luna.

Terraform Labs has yet to respond to FatMan’s allegation.

Do Kwon’s Twitter account has also been silent about future plans recently, and even went private for some time, heightening investor fears over crypto rug pulling.

CoinDesk reporter Krisztian Sandor said investing in either Luna or Lunc was “highly risky at this point”.

“It’s like purchasing a house burned down to ashes or putting money upfront for plans that only exist on paper, respectively.”

He called Lunc’s prospect “uncertain”, as developers now have little incentive to build any project on top of it.

For the newer cryptocurrency, the challenge is how many of the numerous protocols and development teams that were building on old Terra would stick around to develop applications.

Therefore, activity and user numbers pertaining to the new blockchain “would ultimately determine how much Luna is worth and if it will succeed,” he said.