Did We All Miss This? Binance Admitted Luna Is a Fugitive’s Token

• • Traders on Binance who click on “Buy LUNA” on Binance get a warning that the token’s creator is a fugitive and advise them to “understand the risks involved.”
  • Do Kown, the LUNA creator is still on the run and is being pursued by South Korea with the assistance of Interpol.

Since the turn of the millennium, the world has seen its fair share of mega projects, startups and institutions that have collapsed after great domination. Remember Enron, Worldcom, Bear Stearns and Lehmann Brothers? In crypto, there has been no bigger collapse than Terra’s LUNA and UST. However, unlike the Enrons and Worldcoms, it has risen from the ashes under a new name and now trades on major exchanges. For those trading it on Binance, the exchange is courteous enough to remind you that it’s a fugitive’s token, but not concerned enough to deny you access.

In May, the crypto world witnessed its biggest disaster yet when UST, an algorithmic stablecoin, depegged and quickly started losing value. Despite frantic efforts to save it, the (un)stablecoin crashed nonetheless and brought down its sister token LUNA. Over $60 billion worth of value went up in smoke in a week. The ripple effect was even worse and eventually led to the collapse of Three Arrows Capital, Celsius Network, Voyager Digital and several other multi-billion dollar firms.

The genesis of this market collapse was Do Kwon, the founder of Terraform Labs – the maker of the project. However, he was quick to announce that he had launched Terra 2.0, a new project to replace the one that crumbled. This, by itself, is daring. But then again, Kwon is a daring man (years prior, he had developed another failed stablecoin, but that’s for another day).

Prison Awaits Several ‘Crypto Kings’

Back to the new Terra – the token was well received by the exchanges, the same ones that had seen investors’ funds go up in smoke. Kraken, Binance, HitBTC and more all listed the new token. At the time, it was only bad because they were giving Kwon a second chance after he decimated billions of dollars worth of investor funds.

There's been basically no TerraLuna reckoning for the exchanges, which promoted the tokens as safe investments and listed TerraLuna 2.0 weeks after the initial collapse.

— Jacob Silverman (@SilvermanJacob) September 18, 2022

However, in September, Korean authorities started going after Kwon and shortly after, he became an international fugitive, wanted by Interpol. At this point, the exchange knew full well that they were selling a fugitive’s token, and Binance went ahead and admitted it.

First reported by journalist Jacob Silverman, Binance recently put a disclaimer on the Terra token, cautioning users that the token they were about to purchase is from a known fugitive.

I guess this is what passes for an exchange taking responsibility for listing Terra. This token creator is a fugitive from South Korean justice. Now please click this big yellow button. pic.twitter.com/iTLOAplxWo

— Jacob Silverman (@SilvermanJacob) September 21, 2022

It’s clear that even if Kwon is convicted of all the crimes he’s charged with, the exchanges will still list his tokens. After all, they are after profits, and only that.

For Binance, the listing could prove costly. The exchange is already being pursued by over 2,000 investors in the US for listing the original LUNA and UST tokens and advertising the latter as a stablecoin when it so clearly wasn’t. But then again, it’s Changpeng Zhao at the helm, the same CZ who was revealed by Reuters to ask his subordinates to ignore KYC if it meant more money for the exchange.

The day of reckoning will come for CZ, Kwon and others, just like it did for Enron CEO Jeffrey Keith Skilling, who is still in prison and Bernard Ebbers, the former Worldcom CEO who died in 2020 while still serving his 25-year sentence.